Investors Bancorp (NASDAQ: ISBC) and Malvern Bancorp (NASDAQ:MLVF) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitabiliy, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

Dividends

Investors Bancorp pays an annual dividend of $0.32 per share and has a dividend yield of 2.4%. Malvern Bancorp does not pay a dividend. Investors Bancorp pays out 50.0% of its earnings in the form of a dividend.

Insider and Institutional Ownership

76.1% of Investors Bancorp shares are held by institutional investors. Comparatively, 61.2% of Malvern Bancorp shares are held by institutional investors. 3.0% of Investors Bancorp shares are held by insiders. Comparatively, 3.2% of Malvern Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Investors Bancorp and Malvern Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Investors Bancorp 21.92% 5.95% 0.82%
Malvern Bancorp 38.55% 6.35% 0.69%

Analyst Recommendations

This is a summary of current ratings and target prices for Investors Bancorp and Malvern Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Investors Bancorp 1 1 3 0 2.40
Malvern Bancorp 0 1 0 0 2.00

Investors Bancorp currently has a consensus target price of $14.50, suggesting a potential upside of 10.52%. Malvern Bancorp has a consensus target price of $24.00, suggesting a potential upside of 0.00%. Given Investors Bancorp’s stronger consensus rating and higher possible upside, equities analysts plainly believe Investors Bancorp is more favorable than Malvern Bancorp.

Volatility and Risk

Investors Bancorp has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Malvern Bancorp has a beta of -0.01, suggesting that its stock price is 101% less volatile than the S&P 500.

Valuation & Earnings

This table compares Investors Bancorp and Malvern Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Investors Bancorp $672.19 million 5.81 $190.52 million $0.64 20.50
Malvern Bancorp $21.07 million 7.33 $11.97 million $1.86 12.90

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

Summary

Investors Bancorp beats Malvern Bancorp on 9 of the 16 factors compared between the two stocks.

Investors Bancorp Company Profile

Investors Bancorp, Inc. is a holding company for Investors Bank (the Bank). The Bank is a chartered savings bank. The Company is in the business of attracting deposits from the public through its branch network and borrowing funds in the wholesale markets to originate loans and to invest in securities. It originates mortgage loans secured by one-to four-family residential real estate loans, multi-family loans, commercial real estate loans, construction loans, commercial and industrial loans and consumer loans, the majority of which are home equity loans and home equity lines of credit. Securities, primarily United States Government and Federal Agency obligations, mortgage-backed and other securities represented 12.3% of its assets as of December 31, 2012. In December 2013, Investors Bancorp Inc completed its acquisition of Roma Financial Corp, and its subsidiary banks, Roma Bank and RomAsia Bank. In January 2014, Investors Bancorp Inc acquired Gateway Community Financial Corp.

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