Critical Contrast: TFS Financial (NASDAQ:TFSL) and John Marshall Bancorp (NASDAQ:JMSB)

TFS Financial (NASDAQ:TFSL) and John Marshall Bancorp (NASDAQ:JMSB) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, earnings, profitability, analyst recommendations, risk and valuation.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for TFS Financial and John Marshall Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TFS Financial	0	3	1	0	2.25
John Marshall Bancorp	1	0	2	1	2.75

TFS Financial presently has a consensus price target of $19.00, suggesting a potential upside of 16.56%. John Marshall Bancorp has a consensus price target of $25.00, suggesting a potential upside of 9.17%. Given TFS Financial’s higher possible upside, analysts clearly believe TFS Financial is more favorable than John Marshall Bancorp.

Volatility and Risk

TFS Financial has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, John Marshall Bancorp has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.

Valuation & Earnings

This table compares TFS Financial and John Marshall Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TFS Financial	$791.96 million	5.77	$90.96 million	$0.36	45.28
John Marshall Bancorp	$68.17 million	4.74	$21.23 million	$1.73	13.24

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

Insider & Institutional Ownership

9.8% of TFS Financial shares are held by institutional investors. Comparatively, 39.1% of John Marshall Bancorp shares are held by institutional investors. 0.7% of TFS Financial shares are held by company insiders. Comparatively, 12.6% of John Marshall Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares TFS Financial and John Marshall Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TFS Financial	12.36%	5.32%	0.58%
John Marshall Bancorp	20.41%	9.16%	1.04%

Dividends

TFS Financial pays an annual dividend of $1.27 per share and has a dividend yield of 7.8%. John Marshall Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. TFS Financial pays out 352.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. John Marshall Bancorp pays out 23.1% of its earnings in the form of a dividend.

Summary

John Marshall Bancorp beats TFS Financial on 10 of the 17 factors compared between the two stocks.

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.

About John Marshall Bancorp

John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. The Bank is headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, and Tysons, Virginia, as well as Rockville, Maryland, and Washington, D.C. The Bank is dedicated to providing exceptional value, personalized service and convenience to local businesses and professionals in the Washington, D.C. Metropolitan area. The Bank offers a comprehensive line of sophisticated banking products and services that rival those of the largest banks along with experienced staff to help achieve customers’ financial goals. Dedicated relationship managers serve as direct points-of-contact, providing subject matter expertise in a variety of niche industries including charter and private schools, government contractors, health services, nonprofits and associations, professional services, property management companies and title companies