LegacyTexas Financial Group (NASDAQ:LTXB) and Kearny Financial (NASDAQ:KRNY) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, risk, profitability and valuation.

Dividends

LegacyTexas Financial Group pays an annual dividend of $0.88 per share and has a dividend yield of 2.3%. Kearny Financial pays an annual dividend of $0.20 per share and has a dividend yield of 1.5%. LegacyTexas Financial Group pays out 40.4% of its earnings in the form of a dividend. LegacyTexas Financial Group has raised its dividend for 3 consecutive years. LegacyTexas Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

86.6% of LegacyTexas Financial Group shares are held by institutional investors. Comparatively, 65.9% of Kearny Financial shares are held by institutional investors. 3.2% of LegacyTexas Financial Group shares are held by company insiders. Comparatively, 3.6% of Kearny Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
LegacyTexas Financial Group 24.77% 12.44% 1.37%
Kearny Financial 12.42% 2.97% 0.58%

Earnings and Valuation

This table compares LegacyTexas Financial Group and Kearny Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LegacyTexas Financial Group $410.44 million 4.56 $89.49 million $2.18 17.69
Kearny Financial $184.69 million 6.85 $19.59 million N/A N/A

LegacyTexas Financial Group has higher revenue and earnings than Kearny Financial.

Analyst Ratings

This is a breakdown of recent ratings and price targets for LegacyTexas Financial Group and Kearny Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LegacyTexas Financial Group 0 4 4 0 2.50
Kearny Financial 1 0 0 0 1.00

LegacyTexas Financial Group currently has a consensus target price of $47.42, indicating a potential upside of 22.94%. Kearny Financial has a consensus target price of $13.50, indicating a potential upside of 2.74%. Given LegacyTexas Financial Group’s stronger consensus rating and higher probable upside, research analysts plainly believe LegacyTexas Financial Group is more favorable than Kearny Financial.

Risk and Volatility

LegacyTexas Financial Group has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500. Comparatively, Kearny Financial has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500.

Summary

LegacyTexas Financial Group beats Kearny Financial on 12 of the 16 factors compared between the two stocks.

About LegacyTexas Financial Group

LegacyTexas Financial Group, Inc. operates as the holding company for LegacyTexas Bank that provides various banking products and services in the United States. Its deposit products include interest-bearing and non-interest-bearing demand accounts, savings, money market, certificates of deposit, and individual retirement accounts. The company's lending products comprise commercial and consumer real estate loans; secured and unsecured commercial and industrial loans; permanent loans secured by first and second mortgages on one- to four-family residences; construction and land loans; and secured and unsecured consumer loans, including new and used automobile loans, recreational vehicle loans, and loans secured by savings deposits. It also provides insurance and title services. As of January 23, 2018, the company had 3 administrative offices, 44 full-service branches, and 1 commercial loan production office located in Houston, Texas, as well as a Warehouse Purchase Program office located in Littleton, Colorado. The company was formerly known as ViewPoint Financial Group, Inc. and changed its name to LegacyTexas Financial Group, Inc. in January 2015. LegacyTexas Financial Group, Inc. is headquartered in Plano, Texas.

About Kearny Financial

Kearny Financial Corp. operates as the holding company for Kearny Bank that provides various banking products and services in the United States. The company offers various deposit products, including interest-bearing and non-interest-bearing checking accounts, money market deposit accounts, savings accounts, and certificates of deposit accounts. It also provides various loans, such as one-to-four family mortgage loans; commercial mortgages, including loans secured by multi-family, mixed-use, and nonresidential properties; secured and unsecured business loans; consumer loans, such as home equity loans, home equity lines of credit, account loans, overdraft lines of credit, vehicle loans, personal loans, and loans secured by savings accounts and certificates of deposit; and construction loans to builders/developers and individual homeowners. In addition, the company engages in investment activities. As of August 15, 2018, it operated a total of 54 retail branch offices located throughout northern and central New Jersey, and Brooklyn and Staten Island, New York. The company was founded in 1884 and is headquartered in Fairfield, New Jersey.

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