Guaranty Federal Bancshares (NASDAQ: GFED) and Great Southern Bancorp (NASDAQ:GSBC) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitabiliy, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.
Volatility and Risk
Guaranty Federal Bancshares has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Great Southern Bancorp has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.
Guaranty Federal Bancshares pays an annual dividend of $0.40 per share and has a dividend yield of 2.1%. Great Southern Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 1.6%. Guaranty Federal Bancshares pays out 31.0% of its earnings in the form of a dividend. Great Southern Bancorp pays out 26.4% 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.
This table compares Guaranty Federal Bancshares and Great Southern Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Guaranty Federal Bancshares||18.57%||8.13%||0.83%|
|Great Southern Bancorp||21.78%||11.04%||1.06%|
Valuation & Earnings
This table compares Guaranty Federal Bancshares and Great Southern Bancorp’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Guaranty Federal Bancshares||$25.15 million||3.35||$5.70 million||$1.29||14.78|
|Great Southern Bancorp||$185.03 million||4.05||$46.73 million||$3.33||16.05|
Great Southern Bancorp has higher revenue and earnings than Guaranty Federal Bancshares. Guaranty Federal Bancshares is trading at a lower price-to-earnings ratio than Great Southern Bancorp, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
28.1% of Guaranty Federal Bancshares shares are owned by institutional investors. Comparatively, 39.7% of Great Southern Bancorp shares are owned by institutional investors. 12.5% of Guaranty Federal Bancshares shares are owned by company insiders. Comparatively, 23.8% of Great Southern Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a breakdown of current ratings and target prices for Guaranty Federal Bancshares and Great Southern Bancorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Guaranty Federal Bancshares||0||0||0||0||N/A|
|Great Southern Bancorp||0||2||0||0||2.00|
Great Southern Bancorp beats Guaranty Federal Bancshares on 12 of the 13 factors compared between the two stocks.
Guaranty Federal Bancshares Company Profile
Guaranty Federal Bancshares, Inc. is the savings and loan holding company for Guaranty Federal Savings Bank (the Bank). The Company operates through banking operation segment. The banking segment is engaged in the business of originating mortgage loans secured by one- to four-family residences, multi-family, construction, commercial and consumer loans. The Bank’s primary market areas are Greene and Christian Counties, which are in the southwestern corner of Missouri, and includes the cities of Springfield, Nixa and Ozark, and Missouri. The Bank’s loan portfolio consists of mortgage loans, including one- to four-family loans, multi-family loans, construction loans and commercial real estate loans; commercial business loans, and consumer loans. The Bank invests in mortgage-backed securities, the United States Government and federal agency securities, and other marketable securities. The Company owns Guaranty Statutory Trust I and Guaranty Statutory Trust II.
Great Southern Bancorp Company Profile
Great Southern Bancorp, Inc. is a bank holding company, a financial holding company and the parent of Great Southern Bank (the Bank). Through the Bank and subsidiaries of the Bank, the Company offers insurance, travel, investment and related services. The Bank makes long-term, fixed-rate residential real estate loans. It also originates commercial real estate and other residential loans, primarily with adjustable rates or shorter-term fixed rates, and commercial business and consumer loans, primarily in indirect automobile lending. The Company’s investment portfolio consists of mortgage-backed securities, and states and political subdivisions. As of December 31, 2016, the Bank offered a range of banking services through its 104 banking centers located in southern and central Missouri; the Kansas City, Missouri area; the St. Louis, Missouri area; eastern Kansas; northwestern Arkansas; eastern Nebraska, the Minneapolis, Minnesota area, and eastern, western and central Iowa.
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