Sound Financial Bancorp (NASDAQ:SFBC) & WaFd (NASDAQ:WAFD) Financial Survey

WaFd (NASDAQ:WAFD) and Sound Financial Bancorp (NASDAQ:SFBC) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for WaFd and Sound Financial Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WaFd	0	4	1	1	2.50
Sound Financial Bancorp	0	1	0	0	2.00

WaFd presently has a consensus price target of $34.80, suggesting a potential downside of 1.63%. Given WaFd’s stronger consensus rating and higher possible upside, equities analysts plainly believe WaFd is more favorable than Sound Financial Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
WaFd	18.25%	8.94%	0.90%
Sound Financial Bancorp	12.19%	6.99%	0.70%

Insider and Institutional Ownership

83.7% of WaFd shares are held by institutional investors. Comparatively, 68.9% of Sound Financial Bancorp shares are held by institutional investors. 1.5% of WaFd shares are held by company insiders. Comparatively, 12.3% of Sound Financial Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

WaFd pays an annual dividend of $1.08 per share and has a dividend yield of 3.1%. Sound Financial Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 1.9%. WaFd pays out 35.3% of its earnings in the form of a dividend. Sound Financial Bancorp pays out 28.7% 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. WaFd has raised its dividend for 2 consecutive years and Sound Financial Bancorp has raised its dividend for 2 consecutive years.

Valuation & Earnings

This table compares WaFd and Sound Financial Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WaFd	$1.41 billion	1.85	$226.07 million	$3.06	11.56
Sound Financial Bancorp	$61.52 million	1.81	$7.16 million	$2.93	14.82

WaFd has higher revenue and earnings than Sound Financial Bancorp. WaFd 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.

Risk and Volatility

WaFd has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Sound Financial Bancorp has a beta of 0.01, suggesting that its stock price is 99% less volatile than the S&P 500.

Summary

WaFd beats Sound Financial Bancorp on 14 of the 17 factors compared between the two stocks.

About WaFd

WaFd, Inc operates as the bank holding company for Washington Federal Bank that provides lending, depository, insurance, and other banking services in the United States. The company offers deposit products, including business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also provides single-family dwellings, construction, land acquisition and development, consumer lot, multi-family residential, commercial real estate, home equity, business, and consumer loans, as well as commercial and industrial loans. In addition, the company offers insurance brokerage services, such as individual and business insurance policies; holds and markets real estate properties; and debit and credit cards, as well as acts as the trustee. It serves consumers, mid-sized and large businesses, and owners and developers of commercial real estate. The company was formerly known as Washington Federal, Inc. and changed its name to WaFd, Inc in September 2023. WaFd, Inc was founded in 1917 and is headquartered in Seattle, Washington.

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.