Charter Financial Corp. (NASDAQ: CHFN) and Trustmark Corporation (NASDAQ:TRMK) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, earnings, institutional ownership, analyst recommendations, risk and profitability.

Dividends

Charter Financial Corp. pays an annual dividend of $0.28 per share and has a dividend yield of 1.7%. Trustmark Corporation pays an annual dividend of $0.92 per share and has a dividend yield of 3.1%. Charter Financial Corp. pays out 26.9% of its earnings in the form of a dividend. Trustmark Corporation pays out 54.1% 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.

Volatility & Risk

Charter Financial Corp. has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, Trustmark Corporation has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.

Earnings and Valuation

This table compares Charter Financial Corp. and Trustmark Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Charter Financial Corp. $68.25 million 3.43 $14.93 million $1.04 15.68
Trustmark Corporation $569.20 million 3.51 $115.16 million $1.70 17.37

Trustmark Corporation has higher revenue and earnings than Charter Financial Corp.. Charter Financial Corp. is trading at a lower price-to-earnings ratio than Trustmark Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Charter Financial Corp. and Trustmark Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Charter Financial Corp. 21.28% 7.57% 1.07%
Trustmark Corporation 18.35% 8.04% 0.92%

Analyst Recommendations

This is a summary of recent recommendations for Charter Financial Corp. and Trustmark Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Charter Financial Corp. 0 1 1 0 2.50
Trustmark Corporation 0 4 0 0 2.00

Charter Financial Corp. currently has a consensus price target of $18.50, indicating a potential upside of 13.43%. Trustmark Corporation has a consensus price target of $33.50, indicating a potential upside of 13.44%. Given Trustmark Corporation’s higher possible upside, analysts plainly believe Trustmark Corporation is more favorable than Charter Financial Corp..

Institutional & Insider Ownership

65.2% of Charter Financial Corp. shares are held by institutional investors. Comparatively, 62.1% of Trustmark Corporation shares are held by institutional investors. 11.8% of Charter Financial Corp. shares are held by insiders. Comparatively, 1.4% of Trustmark Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Trustmark Corporation beats Charter Financial Corp. on 9 of the 16 factors compared between the two stocks.

About Charter Financial Corp.

Charter Financial Corporation is a savings and loan holding company for CharterBank (the Bank). The Bank is a federally-chartered savings bank. The Bank’s principal business consists of attracting retail deposits from the general public and investing those deposits, together with funds generated from operations, in commercial real estate loans, one- to four-family residential mortgage loans, construction loans and investment securities, commercial business loans, home equity loans and lines of credit, and other consumer loans. The Bank offers a range of community banking services to its customers, including online banking and bill payment services, mobile banking, online cash management, safe deposit box rentals, debit card, and automated teller machine (ATM) card services and the availability of a network of ATMs. As of September 30, 2016, the Company operated 20 branch offices in west-central Georgia, east-central Alabama and the Florida Gulf Coast.

About Trustmark Corporation

Trustmark Corporation is a bank holding company. The Company’s principal subsidiary is Trustmark National Bank (TNB). Through TNB and its subsidiaries, the Company operates as a financial services company providing banking and other financial solutions. It operates through three segments: General Banking, Wealth Management and Insurance. The General Banking Division is responsible for all traditional banking products and services, including loans and deposits. The Wealth Management Division provides customized solutions for customers by integrating financial services with traditional banking products and services, such as money management, full-service brokerage, financial planning, personal and institutional trust and retirement services. Through Fisher Brown Bottrell Insurance, Inc. (FBBI), a subsidiary of TNB, the Insurance Division provides a range of retail insurance products, including commercial risk management products, bonding, group benefits and personal lines coverage.

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