Charter Financial Corp. (NASDAQ: CHFN) and TriState Capital Holdings (NASDAQ:TSC) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitabiliy, institutional ownership, earnings and analyst recommendations.

Risk and Volatility

Charter Financial Corp. has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, TriState Capital Holdings has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500.

Insider & Institutional Ownership

64.4% of Charter Financial Corp. shares are held by institutional investors. Comparatively, 57.0% of TriState Capital Holdings shares are held by institutional investors. 11.8% of Charter Financial Corp. shares are held by company insiders. Comparatively, 23.5% of TriState Capital Holdings shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Charter Financial Corp. and TriState Capital Holdings’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Charter Financial Corp. $68.19 million 3.87 $12.89 million $0.90 20.46
TriState Capital Holdings $125.40 million 5.73 $30.74 million $1.07 23.36

TriState Capital Holdings has higher revenue and earnings than Charter Financial Corp.. Charter Financial Corp. is trading at a lower price-to-earnings ratio than TriState Capital Holdings, indicating that it is currently the more affordable of the two stocks.

Dividends

Charter Financial Corp. pays an annual dividend of $0.26 per share and has a dividend yield of 1.4%. TriState Capital Holdings does not pay a dividend. Charter Financial Corp. pays out 28.9% of its earnings in the form of a dividend.

Profitability

This table compares Charter Financial Corp. and TriState Capital Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Charter Financial Corp. 18.26% 6.60% 0.93%
TriState Capital Holdings 19.84% 8.70% 0.79%

Analyst Ratings

This is a summary of recent recommendations and price targets for Charter Financial Corp. and TriState Capital Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Charter Financial Corp. 0 1 1 0 2.50
TriState Capital Holdings 0 1 2 0 2.67

Charter Financial Corp. currently has a consensus price target of $18.50, suggesting a potential upside of 0.49%. TriState Capital Holdings has a consensus price target of $28.50, suggesting a potential upside of 14.00%. Given TriState Capital Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe TriState Capital Holdings is more favorable than Charter Financial Corp..

Summary

TriState Capital Holdings beats Charter Financial Corp. on 12 of the 16 factors compared between the two stocks.

About Charter Financial Corp.

Charter Financial Corporation is a savings and loan holding company for CharterBank (the Bank). The Bank is a federally-chartered savings bank. The Bank’s principal business consists of attracting retail deposits from the general public and investing those deposits, together with funds generated from operations, in commercial real estate loans, one- to four-family residential mortgage loans, construction loans and investment securities, commercial business loans, home equity loans and lines of credit, and other consumer loans. The Bank offers a range of community banking services to its customers, including online banking and bill payment services, mobile banking, online cash management, safe deposit box rentals, debit card, and automated teller machine (ATM) card services and the availability of a network of ATMs. As of September 30, 2016, the Company operated 20 branch offices in west-central Georgia, east-central Alabama and the Florida Gulf Coast.

About TriState Capital Holdings

TriState Capital Holdings, Inc. is a bank holding company. The Company’s subsidiaries include TriState Capital Bank (the Bank), a Pennsylvania chartered bank; Chartwell Investment Partners, LLC (Chartwell), an investment advisor, and Chartwell TSC Securities Corp. (CTSC Securities). The Company operates through two segments: Bank and Investment Management. The Bank segment provides commercial banking and private banking services to middle-market businesses and high-net-worth individuals through the Bank. The Investment Management segment provides advisory and sub-advisory investment management services to primarily institutional plan sponsors through Chartwell, and also supports distribution and marketing efforts for Chartwell’s investment products through CTSC Securities. The Company offers a range of products and services, including loan and deposit products, cash management services, and capital market services, such as interest rate swaps and investment management products.

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