Critical Survey: Capitol Federal Financial (NASDAQ:CFFN) versus Kentucky First Federal Bancorp (NASDAQ:KFFB)

Kentucky First Federal Bancorp (NASDAQ:KFFB) and Capitol Federal Financial (NASDAQ:CFFN) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Risk and Volatility

Kentucky First Federal Bancorp has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500. Comparatively, Capitol Federal Financial has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500.

Earnings & Valuation

This table compares Kentucky First Federal Bancorp and Capitol Federal Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kentucky First Federal Bancorp	$16.53 million	1.30	-$1.72 million	($0.21)	-12.67
Capitol Federal Financial	$382.09 million	2.22	$38.01 million	$0.29	22.00

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

Analyst Recommendations

This is a summary of current ratings for Kentucky First Federal Bancorp and Capitol Federal Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kentucky First Federal Bancorp	0	0	0	0	N/A
Capitol Federal Financial	0	2	0	0	2.00

Capitol Federal Financial has a consensus target price of $6.75, indicating a potential upside of 5.80%. Given Capitol Federal Financial’s higher probable upside, analysts clearly believe Capitol Federal Financial is more favorable than Kentucky First Federal Bancorp.

Insider and Institutional Ownership

3.2% of Kentucky First Federal Bancorp shares are held by institutional investors. Comparatively, 88.5% of Capitol Federal Financial shares are held by institutional investors. 3.9% of Kentucky First Federal Bancorp shares are held by insiders. Comparatively, 2.2% of Capitol Federal Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Kentucky First Federal Bancorp and Capitol Federal Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kentucky First Federal Bancorp	-10.41%	-1.58%	-0.21%
Capitol Federal Financial	9.95%	4.69%	0.50%

Summary

Capitol Federal Financial beats Kentucky First Federal Bancorp on 11 of the 12 factors compared between the two stocks.

About Kentucky First Federal Bancorp

Kentucky First Federal Bancorp operates as the holding company for First Federal Savings and Loan Association of Hazard, and Frankfort First Bancorp, Inc. that provide various banking products and services in Kentucky. It accepts deposit products include passbook savings and certificate accounts, checking accounts, and individual retirement accounts. The company's loan portfolio comprises one-to four-family residential mortgage loans; construction loans; mortgage loans secured by multi-family property; nonresidential loans that are secured by commercial office buildings, churches, and properties used for other purposes; commercial non-mortgage loans; and consumer loans, such as home equity lines of credit, loans secured by savings deposits, automobile loans, and unsecured or personal loans. It also invests in mortgage-backed securities. The company was incorporated in 2005 and is based in Hazard, Kentucky. Kentucky First Federal Bancorp is a subsidiary of First Federal MHC.

About Capitol Federal Financial

Capitol Federal Financial, Inc. operates as the holding company for Capitol Federal Savings Bank that provides various retail banking products and services in the United States. The company accepts a range of deposit products, including savings accounts, money market accounts, interest-bearing and non-interest-bearing checking accounts, and certificates of deposit. It also provides various loan products, such as one- to four-family residential real estate loans, commercial real estate, commercial and industrial, construction loans, and small business loans, as well as consumer loans, which include home equity loans and lines of credit, home improvement loans, vehicle loans, and loans secured by savings deposits. In addition, the company offers mobile, telephone, and online banking services, as well as bill payment services; credit cards; mortgage loan; operates a call center; and invests in various securities. The company serves the metropolitan areas of Topeka, Wichita, Lawrence, Manhattan, Emporia, and Salina, Kansas, and a portion of the metropolitan area of greater Kansas City. Capitol Federal Financial, Inc. was founded in 1893 and is headquartered in Topeka, Kansas.