Columbia Banking System (NASDAQ:COLB) vs. Sound Financial Bancorp (NASDAQ:SFBC) Critical Contrast

Columbia Banking System (NASDAQ:COLB) and Sound Financial Bancorp (NASDAQ:SFBC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Earnings and Valuation

This table compares Columbia Banking System and Sound Financial Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Banking System	$2.97 billion	2.92	$533.67 million	$2.22	13.04
Sound Financial Bancorp	$62.03 million	1.86	$4.64 million	$2.64	17.04

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

Risk and Volatility

Columbia Banking System has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Sound Financial Bancorp has a beta of 0.1, suggesting that its share price is 90% less volatile than the S&P 500.

Dividends

Columbia Banking System pays an annual dividend of $1.48 per share and has a dividend yield of 5.1%. Sound Financial Bancorp pays an annual dividend of $0.76 per share and has a dividend yield of 1.7%. Columbia Banking System pays out 66.7% of its earnings in the form of a dividend. Sound Financial Bancorp pays out 28.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Columbia Banking System has raised its dividend for 4 consecutive years and Sound Financial Bancorp has raised its dividend for 2 consecutive years. Columbia Banking System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and target prices for Columbia Banking System and Sound Financial Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Banking System	0	11	3	1	2.33
Sound Financial Bancorp	0	1	0	0	2.00

Columbia Banking System currently has a consensus price target of $29.50, indicating a potential upside of 1.90%. Given Columbia Banking System’s stronger consensus rating and higher possible upside, research analysts plainly believe Columbia Banking System is more favorable than Sound Financial Bancorp.

Institutional and Insider Ownership

92.5% of Columbia Banking System shares are owned by institutional investors. Comparatively, 68.9% of Sound Financial Bancorp shares are owned by institutional investors. 0.7% of Columbia Banking System shares are owned by insiders. Comparatively, 12.4% of Sound Financial Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Columbia Banking System and Sound Financial Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Columbia Banking System	15.98%	11.13%	1.18%
Sound Financial Bancorp	10.97%	6.48%	0.65%

Summary

Columbia Banking System beats Sound Financial Bancorp on 14 of the 18 factors compared between the two stocks.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.

About Sound Financial Bancorp

Sound Financial Bancorp, Inc. operates as the bank holding company for Sound Community Bank that provides banking and other financial services for consumers and businesses. It accepts various deposits products comprising savings, money market deposit, NOW, and demand accounts, as well as certificates of deposit. The company also offers loans secured by first and second mortgages on one-to four-family residences; home equity loans, including fixed-rate loans and variable-rate lines of credit; commercial and multifamily real estate loans; construction loans secured by single-family residences, and commercial and multifamily real estate; land loans; commercial business loans to finance commercial vehicles and equipment, as well as loans secured by accounts receivable and/or inventory; and secured and unsecured consumer loans, such as new and used manufactured homes, floating homes, automobiles, boats, and recreational vehicle loans, and loans secured by deposit accounts. The company was founded in 1953 and is headquartered in Seattle, Washington.