Head-To-Head Survey: Flushing Financial (NASDAQ:FFIC) & Security Bancorp (OTCMKTS:SCYT)

Flushing Financial (NASDAQ:FFIC) and Security Bancorp (OTCMKTS:SCYT) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, analyst recommendations, institutional ownership, earnings, dividends and risk.

Institutional and Insider Ownership

67.1% of Flushing Financial shares are owned by institutional investors. 5.7% of Flushing Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Flushing Financial has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Security Bancorp has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500.

Dividends

Flushing Financial pays an annual dividend of $0.88 per share and has a dividend yield of 7.6%. Security Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. Flushing Financial pays out -62.0% of its earnings in the form of a dividend. Security Bancorp pays out 9.3% 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. Flushing Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Flushing Financial	-9.07%	3.67%	0.28%
Security Bancorp	17.76%	N/A	N/A

Analyst Recommendations

This is a breakdown of current recommendations for Flushing Financial and Security Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flushing Financial	0	2	1	0	2.33
Security Bancorp	0	0	0	0	0.00

Flushing Financial presently has a consensus price target of $16.17, suggesting a potential upside of 40.21%. Given Flushing Financial’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Flushing Financial is more favorable than Security Bancorp.

Valuation & Earnings

This table compares Flushing Financial and Security Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flushing Financial	$484.72 million	0.80	-$31.33 million	($1.42)	-8.12
Security Bancorp	$22.38 million	1.28	$4.06 million	$10.76	7.03

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

Summary

Flushing Financial beats Security Bancorp on 11 of the 16 factors compared between the two stocks.

About Flushing Financial

Flushing Financial Corporation operates as the bank holding company for Flushing Bank that provides banking products and services primarily to consumers, businesses, and governmental units. It offers various deposit products, including checking and savings accounts, money market accounts, non-interest bearing demand accounts, NOW accounts, and certificates of deposit. The company also provides mortgage loans secured by multi-family residential, commercial real estate, one-to-four family mixed-use property, one-to-four family residential property, and commercial business loans; construction loans; small business administration loans and other small business loans; mortgage loan surrogates, such as mortgage-backed securities; and consumer loans, including overdraft lines of credit, as well as the United States government securities, corporate fixed-income securities, and other marketable securities. It operates full-service banking offices in Queens, Nassau, Suffolk, Kings, and New York counties, New York; and an internet branch under the iGObanking and BankPurely brands. Flushing Financial Corporation was founded in 1929 and is based in Uniondale, New York.

About Security Bancorp

Security Bancorp, Inc. operates as the bank holding company for Security Federal Savings Bank that provides banking products and services to individual and corporate customers in Tennessee. The company's deposit products include checking and savings accounts, and certificates of deposit. It also offers consumer loans; mortgage loans; and commercial loans, including installment loans, lines of credit, and real estate lending. In addition, the company provides financial services, as well as online, mobile, and telephone banking services. Security Bancorp, Inc. was founded in 1960 and is headquartered in McMinnville, Tennessee.