Analyzing SR Bancorp (NASDAQ:SRBK) & Sumitomo Mitsui Trust (OTCMKTS:SUTNY)

Sumitomo Mitsui Trust (OTCMKTS:SUTNY) and SR Bancorp (NASDAQ:SRBK) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Dividends

Sumitomo Mitsui Trust pays an annual dividend of $0.10 per share and has a dividend yield of 2.0%. SR Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. Sumitomo Mitsui Trust pays out 23.3% of its earnings in the form of a dividend. SR Bancorp pays out 47.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sumitomo Mitsui Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Sumitomo Mitsui Trust and SR Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sumitomo Mitsui Trust	0	1	0	0	2.00
SR Bancorp	0	2	0	0	2.00

SR Bancorp has a consensus price target of $19.00, suggesting a potential upside of 0.26%. Given SR Bancorp’s higher probable upside, analysts plainly believe SR Bancorp is more favorable than Sumitomo Mitsui Trust.

Earnings and Valuation

This table compares Sumitomo Mitsui Trust and SR Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sumitomo Mitsui Trust	$19.82 billion	1.42	$1.99 billion	$0.43	11.88
SR Bancorp	$34.19 million	4.40	$3.35 million	$0.51	37.16

Sumitomo Mitsui Trust has higher revenue and earnings than SR Bancorp. Sumitomo Mitsui Trust is trading at a lower price-to-earnings ratio than SR Bancorp, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

24.7% of SR Bancorp shares are owned by institutional investors. 9.9% of SR Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Sumitomo Mitsui Trust and SR Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sumitomo Mitsui Trust	11.81%	10.45%	0.45%
SR Bancorp	6.95%	1.82%	0.29%

Summary

Sumitomo Mitsui Trust beats SR Bancorp on 7 of the 13 factors compared between the two stocks.

About Sumitomo Mitsui Trust

Sumitomo Mitsui Trust Holdings, Inc. operates as a trust bank in Japan and internationally. It offers supervising services for management strategies, and financial and human resource management; and general affairs, business process, corporate administration, operational process, risk, and compliance management services; and internal auditing services. The company also provides real estate brokerage, investment management, and investment advisory services for individual and corporate clients; high-level professional consulting services; loan guarantees and payment collection agency services; issuing credit cards; internet banking; securities administration and credit card services; and advanced financial instruments, such as leasing and credit services, and credit card financing services, as well as mortgage loans and managing private equity funds and related advisory services. In addition, it offers back-office services, such as business management and system administration for stock transfer agencies; clerical works, including managing shareholders registry and special accounts; custody and fund administration services; stock transfer agency services; asset management services; and retail total solution, marketing, and fiduciary services, as well as system development and maintenance. Further, the company provides facilities management, clerical work outsourcing, and leasing of buildings; consulting services related to digital transformation, data-analytics, and a range of research and studies; and evaluation of mutual funds, discretionary investment funds, and insurance products, as well as engages in trustee and temporary staffing businesses. The company was formerly known as Chuo Mitsui Trust Holdings, Inc. and changed its name to Sumitomo Mitsui Trust Holdings, Inc. in 2011. Sumitomo Mitsui Trust Holdings, Inc. was founded in 1924 and is headquartered in Tokyo, Japan.

About SR Bancorp

SR Bancorp, Inc. operates as the holding company for Somerset Regal Bank that provides customary retail and commercial banking services to individuals, businesses, and local municipalities in the communities of Somerset, Middlesex, Hunterdon, and Essex counties in New Jersey. It offers deposit instruments, including noninterest-bearing demand deposits, interest-bearing demand accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides loans comprising one- to four family-residential mortgage loans, home equity loans and lines of credit, unsecured personal loans, and rehabilitation loans; and bill payment services. In addition, it is involved in the investment activities. The company was founded in 1887 and is headquartered in Bound Brook, New Jersey.