TFS Financial (NASDAQ:TFSL) and Magyar Bancorp (NASDAQ:MGYR) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations and price targets for TFS Financial and Magyar Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TFS Financial 0 0 1 0 3.00
Magyar Bancorp 0 0 0 0 N/A

TFS Financial currently has a consensus target price of $18.00, suggesting a potential upside of 1.41%. Given TFS Financial’s higher possible upside, analysts plainly believe TFS Financial is more favorable than Magyar Bancorp.

Earnings and Valuation

This table compares TFS Financial and Magyar Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TFS Financial $464.58 million 8.68 $85.40 million $0.32 55.47
Magyar Bancorp $26.47 million 2.52 $2.03 million N/A N/A

TFS Financial has higher revenue and earnings than Magyar Bancorp.

Dividends

TFS Financial pays an annual dividend of $1.00 per share and has a dividend yield of 5.6%. Magyar Bancorp does not pay a dividend. TFS Financial pays out 312.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TFS Financial has increased its dividend for 2 consecutive years.

Risk & Volatility

TFS Financial has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500. Comparatively, Magyar Bancorp has a beta of 0.06, indicating that its stock price is 94% less volatile than the S&P 500.

Institutional & Insider Ownership

14.4% of TFS Financial shares are held by institutional investors. Comparatively, 18.0% of Magyar Bancorp shares are held by institutional investors. 1.8% of TFS Financial shares are held by company insiders. Comparatively, 3.9% of Magyar Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
TFS Financial 16.26% 4.62% 0.56%
Magyar Bancorp 10.01% 5.51% 0.45%

Summary

TFS Financial beats Magyar Bancorp on 11 of the 15 factors compared between the two stocks.

About TFS Financial

TFS Financial Corporation, through its subsidiaries, provides retail consumer banking services in the United States. The company's deposit products include savings, money market, checking, certificate of deposit, individual retirement, and other qualified plan accounts. It also provides residential real estate mortgage loans, residential construction loans, and home equity loans and lines of credit, as well as purchase mortgages and first mortgage refinance loans. In addition, the company engages in the net lease transactions of commercial buildings; and provision of escrow and settlement services. It provides its products and services through its main office in Cleveland, Ohio; and 38 full-service branches and 8 loan production offices located throughout the states of Ohio and Florida. The company was founded in 1938 and is headquartered in Cleveland, Ohio. TFS Financial Corporation is a subsidiary of Third Federal Savings and Loan Association of Cleveland, MHC.

About Magyar Bancorp

Magyar Bancorp, Inc. operates as the mid-tier stock holding company for Magyar Bank that provides various banking products and services to families and businesses in New Jersey, the United States. Its product portfolio includes various deposit products, such as demand, NOW, money market, savings, and retirement accounts, as well as certificates of deposit; and loan products comprising one-to four-family residential mortgage loans, multi-family and commercial real estate mortgage loans, home equity loans and lines of credit, commercial business loans, small business administration loans, and construction loans, as well as consumer loans, which primarily include secured demand loans. The company also provides non-deposit investment products and financial planning services, including insurance products, fixed and variable annuities, and retirement planning for individual and commercial customers; and investment securities. It operates through seven branch locations in New Brunswick, North Brunswick, South Brunswick, Branchburg, Bridgewater, and Edison; and a loan product office in New Jersey. The company was founded in 1922 and is headquartered in New Brunswick, New Jersey. Magyar Bancorp, Inc. is a subsidiary of Magyar Bancorp, MHC.

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