Analyzing Sound Financial Bancorp (NASDAQ:SFBC) and Pathfinder Bancorp (NASDAQ:PBHC)

Sound Financial Bancorp (NASDAQ:SFBC) and Pathfinder Bancorp (NASDAQ:PBHC) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Profitability

This table compares Sound Financial Bancorp and Pathfinder Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sound Financial Bancorp	13.88%	7.82%	0.79%
Pathfinder Bancorp	0.13%	0.08%	0.01%

Volatility & Risk

Sound Financial Bancorp has a beta of 0.05, suggesting that its stock price is 95% less volatile than the S&P 500. Comparatively, Pathfinder Bancorp has a beta of 0.11, suggesting that its stock price is 89% less volatile than the S&P 500.

Earnings and Valuation

This table compares Sound Financial Bancorp and Pathfinder Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Financial Bancorp	$41.08 million	2.82	$7.16 million	$3.36	13.44
Pathfinder Bancorp	$79.15 million	1.05	-$1.93 million	$0.01	1,694.40

Sound Financial Bancorp has higher earnings, but lower revenue than Pathfinder Bancorp. Sound Financial Bancorp is trading at a lower price-to-earnings ratio than Pathfinder Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Sound Financial Bancorp and Pathfinder Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Financial Bancorp	0	1	0	0	2.00
Pathfinder Bancorp	0	1	0	0	2.00

Institutional & Insider Ownership

68.8% of Sound Financial Bancorp shares are owned by institutional investors. Comparatively, 26.7% of Pathfinder Bancorp shares are owned by institutional investors. 12.3% of Sound Financial Bancorp shares are owned by insiders. Comparatively, 15.7% of Pathfinder Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Sound Financial Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 1.9%. Pathfinder Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.4%. Sound Financial Bancorp pays out 25.0% of its earnings in the form of a dividend. Pathfinder Bancorp pays out 4,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sound Financial Bancorp has raised its dividend for 2 consecutive years and Pathfinder Bancorp has raised its dividend for 1 consecutive years.

Summary

Sound Financial Bancorp beats Pathfinder Bancorp on 9 of the 14 factors compared between the two stocks.

About Sound Financial Bancorp

Sound Financial Bancorp, Inc. is a bank holding company headquartered in Seattle, Washington. Through its principal subsidiary, Sound Community Bank, the company provides banking and financial services to individuals, families, businesses and nonprofit organizations in the Puget Sound region. Sound Community Bank offers deposit products, including checking, savings, money market and certificate accounts, along with residential mortgage, commercial real estate, construction, commercial and industrial, consumer and small-business loans.

About Pathfinder Bancorp

Pathfinder Bancorp, Inc. is a bank holding company headquartered in Oswego, New York. Through its principal subsidiary, Pathfinder Bank, the company provides banking and financial services to individuals, families, businesses and organizations in Central New York. Pathfinder Bank offers deposit accounts, consumer and commercial lending, residential and commercial real estate loans, mortgage products and other traditional banking services. The bank also provides cash management and related financial solutions designed to support small businesses, commercial customers and municipal organizations.