Investors Bancorp (NASDAQ: ISBC) and Malvern Bancorp (NASDAQ:MLVF) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitabiliy and dividends.

Valuation and Earnings

This table compares Investors Bancorp and Malvern Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Investors Bancorp $678.79 million 5.77 $186.37 million $0.63 21.03
Malvern Bancorp $22.67 million 7.13 $12.43 million $1.93 13.01

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

Dividends

Investors Bancorp pays an annual dividend of $0.32 per share and has a dividend yield of 2.4%. Malvern Bancorp does not pay a dividend. Investors Bancorp pays out 50.8% of its earnings in the form of a dividend.

Profitability

This table compares Investors Bancorp and Malvern Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Investors Bancorp 20.91% 5.80% 0.78%
Malvern Bancorp 37.03% 6.71% 0.73%

Insider & Institutional Ownership

78.1% of Investors Bancorp shares are held by institutional investors. Comparatively, 58.1% of Malvern Bancorp shares are held by institutional investors. 3.0% of Investors Bancorp shares are held by insiders. Comparatively, 3.2% of Malvern Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Investors Bancorp and Malvern Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Investors Bancorp 1 1 4 0 2.50
Malvern Bancorp 0 1 0 0 2.00

Investors Bancorp currently has a consensus target price of $15.08, suggesting a potential upside of 13.84%. Malvern Bancorp has a consensus target price of $24.00, suggesting a potential downside of 4.38%. Given Investors Bancorp’s stronger consensus rating and higher probable upside, equities analysts clearly believe Investors Bancorp is more favorable than Malvern Bancorp.

Summary

Investors Bancorp beats Malvern Bancorp on 9 of the 15 factors compared between the two stocks.

Investors Bancorp Company Profile

Investors Bancorp, Inc. is a holding company for Investors Bank (the Bank). The Bank is a chartered savings bank. The Company is in the business of attracting deposits from the public through its branch network and borrowing funds in the wholesale markets to originate loans and to invest in securities. It originates mortgage loans secured by one-to four-family residential real estate loans, multi-family loans, commercial real estate loans, construction loans, commercial and industrial loans and consumer loans, the majority of which are home equity loans and home equity lines of credit. Securities, primarily United States Government and Federal Agency obligations, mortgage-backed and other securities represented 12.3% of its assets as of December 31, 2012. In December 2013, Investors Bancorp Inc completed its acquisition of Roma Financial Corp, and its subsidiary banks, Roma Bank and RomAsia Bank. In January 2014, Investors Bancorp Inc acquired Gateway Community Financial Corp.

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