Simmons First National (NASDAQ:SFNC) versus Sound Financial Bancorp (NASDAQ:SFBC) Head to Head Analysis

Sound Financial Bancorp (NASDAQ:SFBC) and Simmons First National (NASDAQ:SFNC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Dividends

Sound Financial Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 1.7%. Simmons First National pays an annual dividend of $0.86 per share and has a dividend yield of 3.7%. Sound Financial Bancorp pays out 26.9% of its earnings in the form of a dividend. Simmons First National pays out -34.0% 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. Sound Financial Bancorp has increased its dividend for 2 consecutive years and Simmons First National has increased its dividend for 14 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Sound Financial Bancorp and Simmons First National”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Financial Bancorp	$40.28 million	3.06	$7.16 million	$3.12	15.38
Simmons First National	$160.24 million	20.93	-$397.55 million	($2.53)	-9.17

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

Profitability

This table compares Sound Financial Bancorp and Simmons First National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sound Financial Bancorp	12.89%	7.31%	0.74%
Simmons First National	-24.64%	8.32%	1.16%

Analyst Recommendations

This is a breakdown of current ratings for Sound Financial Bancorp and Simmons First National, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Financial Bancorp	0	0	1	0	3.00
Simmons First National	1	4	3	1	2.44

Simmons First National has a consensus target price of $25.50, indicating a potential upside of 9.87%. Given Simmons First National’s higher probable upside, analysts plainly believe Simmons First National is more favorable than Sound Financial Bancorp.

Volatility and Risk

Sound Financial Bancorp has a beta of 0.01, indicating that its stock price is 99% less volatile than the S&P 500. Comparatively, Simmons First National has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500.

Insider & Institutional Ownership

68.8% of Sound Financial Bancorp shares are held by institutional investors. Comparatively, 27.6% of Simmons First National shares are held by institutional investors. 12.3% of Sound Financial Bancorp shares are held by company insiders. Comparatively, 0.8% of Simmons First National shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Simmons First National beats Sound Financial Bancorp on 11 of the 18 factors compared between the two stocks.

About Sound Financial Bancorp

Sound Financial Bancorp, Inc. operates as the bank holding company for Sound Community Bank that provides banking and other financial services for consumers and businesses. It accepts various deposits products comprising savings, money market deposit, NOW, and demand accounts, as well as certificates of deposit. The company also offers loans secured by first and second mortgages on one-to four-family residences; home equity loans, including fixed-rate loans and variable-rate lines of credit; commercial and multifamily real estate loans; construction loans secured by single-family residences, and commercial and multifamily real estate; land loans; commercial business loans to finance commercial vehicles and equipment, as well as loans secured by accounts receivable and/or inventory; and secured and unsecured consumer loans, such as new and used manufactured homes, floating homes, automobiles, boats, and recreational vehicle loans, and loans secured by deposit accounts. The company was founded in 1953 and is headquartered in Seattle, Washington.

About Simmons First National

Simmons First National Corporation operates as the holding company for Simmons Bank that provides banking and other financial products and services to individuals and businesses. The company offers checking, savings, and time deposits; consumer, real estate, and commercial loans; agricultural finance, equipment, and small business administration lending; trust and fiduciary services; credit cards; investment management products; treasury management; insurance products; and securities and investment services. It also provides ATM services; Internet and mobile banking platforms; overdraft facilities; and safe deposit boxes. The company was founded in 1903 and is headquartered in Pine Bluff, Arkansas.