Kearny Financial (NASDAQ: KRNY) and Malvern Bancorp (NASDAQ:MLVF) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.

Insider and Institutional Ownership

62.8% of Kearny Financial shares are owned by institutional investors. Comparatively, 65.7% of Malvern Bancorp shares are owned by institutional investors. 2.7% of Kearny Financial shares are owned by company insiders. Comparatively, 3.2% of Malvern Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Kearny Financial 12.37% 1.68% 0.40%
Malvern Bancorp 37.03% 6.64% 0.70%

Dividends

Kearny Financial pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. Malvern Bancorp does not pay a dividend. Kearny Financial pays out 57.1% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Kearny Financial and Malvern Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kearny Financial 1 0 1 0 2.00
Malvern Bancorp 0 1 0 0 2.00

Kearny Financial presently has a consensus price target of $15.00, suggesting a potential upside of 5.26%. Malvern Bancorp has a consensus price target of $24.00, suggesting a potential upside of 3.45%. Given Kearny Financial’s higher possible upside, research analysts clearly believe Kearny Financial is more favorable than Malvern Bancorp.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kearny Financial $108.54 million 10.81 $17.30 million $0.21 67.86
Malvern Bancorp $22.67 million 6.73 $12.69 million $1.93 12.02

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

Kearny Financial Company Profile

Kearny Bank is principally engaged in the business of attracting deposits from the general public at its 41 locations in New Jersey and using these deposits, together with other funds, to originate or purchase loans for its portfolio and invest in securities. Loans originated or purchased by the Bank generally include loans collateralized by residential and commercial real estate augmented by secured and unsecured loans to businesses and consumers. The investment securities purchased by the Bank generally include United States agency mortgage-backed securities, United States government and agency debentures and bank-qualified municipal obligations.

Malvern Bancorp Company Profile

Malvern Bancorp, Inc. operates as the holding company for Malvern Federal Savings Bank that provides various banking products and services to consumer and business customers in Pennsylvania. The company offers checking accounts, retirement accounts, money market accounts, time and savings accounts, interest and non-interest bearing accounts, NOW accounts, and CDARS/ICS reciprocal deposits; and debit and credit card, wire transfer, automated teller, Internet banking, ACH origination, safe deposit box, telephone banking, and mobile banking services. It also provides residential mortgage loans, such as one class and one-to four-family first lien residential mortgage loans; residential and commercial construction loans, and land loans; commercial loans, including commercial real estate loans, multi-family real estate loans, industrial loans, and commercial business loans; and consumer loans, such as home equity lines of credit, second mortgage loans, and unsecured consumer lines of credit. In addition, the company offers liquidity management, investment, custody, wealth planning, trust and fiduciary, insurance, and 401k services to high net worth individuals and families. Further, it provides remote deposit capture banking for business customers; and mobile remote deposit capture banking for retail and business customers. The company operates eight financial center offices in Chester and Delaware Counties, Pennsylvania, as well as a private banking loan production office in Morristown, New Jersey. Malvern Bancorp, Inc. was founded in 1887 and is headquartered in Paoli, Pennsylvania.

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