TFS Financial (NASDAQ:TFSL) and Suruga Bank (OTCMKTS:SUGBY) Critical Survey

Suruga Bank (OTCMKTS:SUGBY) and TFS Financial (NASDAQ:TFSL) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Insider and Institutional Ownership

9.8% of TFS Financial shares are held by institutional investors. 1.0% of TFS Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Suruga Bank pays an annual dividend of $1.70 per share and has a dividend yield of 2.1%. TFS Financial pays an annual dividend of $1.13 per share and has a dividend yield of 7.9%. Suruga Bank pays out 18.4% of its earnings in the form of a dividend. TFS Financial pays out 353.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Suruga Bank and TFS Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Suruga Bank	24.79%	8.96%	0.77%
TFS Financial	10.67%	4.40%	0.48%

Valuation and Earnings

This table compares Suruga Bank and TFS Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Suruga Bank	$598.19 million	2.64	$133.17 million	$9.26	8.64
TFS Financial	$321.47 million	12.47	$79.59 million	$0.32	44.67

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

Analyst Ratings

This is a breakdown of current recommendations for Suruga Bank and TFS Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Suruga Bank	0	0	0	0	0.00
TFS Financial	0	0	1	0	3.00

Volatility and Risk

Suruga Bank has a beta of -0.08, indicating that its stock price is 108% less volatile than the S&P 500. Comparatively, TFS Financial has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Summary

TFS Financial beats Suruga Bank on 8 of the 15 factors compared between the two stocks.

About Suruga Bank

Suruga Bank Ltd. provides various banking and financial products and services to individuals and corporate customers in Japan. The company offers deposit products, such as time, ordinary, savings, foreign currency, and other deposits, as well as current and general accounts; card, housing, second house, startup, and business up term loans, as well as loans by purpose; credit and debit cards; overdrafts; and other financing products. It also provides investment trust, public bond, pension contribution, insurance, inheritance/trust, lottery, foreign currency, pay-easy, web direct, safe deposit box, external linkage, foreign remittance, fund management, e-combination, payment, nursing care/medical care/dispensing compensation receivable factoring, mortgage, and Internet and telephone banking services. In addition, the company offers staffing, money lending, guarantee, printing, leasing, and agency services. The company was incorporated in 1895 and is headquartered in Numazu, Japan.

About TFS Financial

TFS Financial Corporation, through its subsidiaries, provides retail consumer banking services in the United States. Its deposit products include savings, money market, checking, individual retirement, and other qualified plan accounts, as well as certificates of deposit. The company also provides residential real estate mortgage loans, residential construction loans, and home equity loans and lines of credit, as well as purchase mortgages and first mortgage refinance loans. In addition, it offers escrow and settlement services. The company provides its products and services through its main office in Cleveland, Ohio; and multiple full-service branches and loan production offices located throughout the states of Ohio and Florida. TFS Financial Corporation was founded in 1938 and is headquartered in Cleveland, Ohio. TFS Financial Corporation is a subsidiary of Third Federal Savings and Loan Association of Cleveland, MHC.