Critical Survey: TrustCo Bank Corp NY (NASDAQ:TRST) & SR Bancorp (NASDAQ:SRBK)

TrustCo Bank Corp NY (NASDAQ:TRST) and SR Bancorp (NASDAQ:SRBK) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, analyst recommendations, valuation and profitability.

Volatility & Risk

TrustCo Bank Corp NY has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, SR Bancorp has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for TrustCo Bank Corp NY and SR Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TrustCo Bank Corp NY	0	0	1	0	3.00
SR Bancorp	0	1	1	0	2.50

SR Bancorp has a consensus target price of $16.00, indicating a potential downside of 16.36%. Given SR Bancorp’s higher possible upside, analysts clearly believe SR Bancorp is more favorable than TrustCo Bank Corp NY.

Dividends

TrustCo Bank Corp NY pays an annual dividend of $1.52 per share and has a dividend yield of 3.2%. SR Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.0%. TrustCo Bank Corp NY pays out 44.6% of its earnings in the form of a dividend. SR Bancorp pays out 55.6% 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. TrustCo Bank Corp NY is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares TrustCo Bank Corp NY and SR Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TrustCo Bank Corp NY	$278.36 million	2.95	$61.14 million	$3.41	13.73
SR Bancorp	$48.54 million	3.29	$5.14 million	$0.36	53.14

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

Profitability

This table compares TrustCo Bank Corp NY and SR Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TrustCo Bank Corp NY	22.42%	9.21%	0.98%
SR Bancorp	5.82%	1.27%	0.22%

Institutional & Insider Ownership

68.6% of TrustCo Bank Corp NY shares are held by institutional investors. Comparatively, 24.7% of SR Bancorp shares are held by institutional investors. 3.4% of TrustCo Bank Corp NY shares are held by company insiders. Comparatively, 7.8% of SR Bancorp 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.

Summary

TrustCo Bank Corp NY beats SR Bancorp on 11 of the 15 factors compared between the two stocks.

About TrustCo Bank Corp NY

TrustCo Bank Corp NY operates as the holding company for Trustco Bank, a federal savings bank that provides personal and business banking services to individuals and businesses. The company accepts deposits; and offers loans and investments. It also operates as a real estate investment trust that acquires, holds, and manages real estate mortgage assets, including residential mortgage loans and mortgage-backed securities. In addition, the company serves as the executor of estates and trustee of personal trusts; provides asset and wealth management, estate planning and related advice, and custodial services; and acts as trustee for various types of employee benefit plans, and corporate pension and profit-sharing trusts. It operates through banking offices in Albany, Columbia, Dutchess, Greene, Montgomery, Orange, Putnam, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Ulster, Warren, Washington, and Westchester counties of New York; Brevard, Charlotte, Flagler, Hillsborough, Indian River, Lake, Manatee, Martin, Orange, Osceola, Palm Beach, Polk, Sarasota, Seminole, and Volusia counties in Florida; Bennington County in Vermont; Berkshire County in Massachusetts; and Bergen County in New Jersey, as well as automatic teller machines. The company was founded in 1902 and is headquartered in Glenville, New York.

About SR Bancorp

SR Bancorp, Inc. operates as the holding company for Somerset Regal Bank that provides customary retail and commercial banking services to individuals, businesses, and local municipalities in the communities of Somerset, Middlesex, Hunterdon, and Essex counties in New Jersey. It offers deposit instruments, including noninterest-bearing demand deposits, interest-bearing demand accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides loans comprising one- to four family-residential mortgage loans, home equity loans and lines of credit, unsecured personal loans, and rehabilitation loans; and bill payment services. In addition, it is involved in the investment activities. The company was founded in 1887 and is headquartered in Bound Brook, New Jersey.