Critical Contrast: Flagstar Bancorp (NYSE:FBC) & SEC BANCORP INC/SH SH (NYSE:SCYT)

Flagstar Bancorp (NYSE:FBC) and SEC BANCORP INC/SH SH (OTCMKTS:SCYT) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitability, analyst recommendations and earnings.

Earnings & Valuation

This table compares Flagstar Bancorp and SEC BANCORP INC/SH SH’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Flagstar Bancorp $1.12 billion 1.61 $187.00 million $3.02 10.58
SEC BANCORP INC/SH SH N/A N/A N/A N/A N/A

Flagstar Bancorp has higher revenue and earnings than SEC BANCORP INC/SH SH.

Insider & Institutional Ownership

98.7% of Flagstar Bancorp shares are held by institutional investors. Comparatively, 4.2% of SEC BANCORP INC/SH SH shares are held by institutional investors. 49.9% of Flagstar Bancorp shares are held by 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.

Dividends

Flagstar Bancorp pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. SEC BANCORP INC/SH SH pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. Flagstar Bancorp pays out 5.3% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings and target prices for Flagstar Bancorp and SEC BANCORP INC/SH SH, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flagstar Bancorp 0 3 5 0 2.63
SEC BANCORP INC/SH SH 0 0 0 0 N/A

Flagstar Bancorp presently has a consensus price target of $37.00, suggesting a potential upside of 15.77%. Given Flagstar Bancorp’s higher possible upside, research analysts plainly believe Flagstar Bancorp is more favorable than SEC BANCORP INC/SH SH.

Profitability

This table compares Flagstar Bancorp and SEC BANCORP INC/SH SH’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Flagstar Bancorp 16.38% 11.60% 0.95%
SEC BANCORP INC/SH SH N/A N/A N/A

Risk and Volatility

Flagstar Bancorp has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, SEC BANCORP INC/SH SH has a beta of 0.18, meaning that its stock price is 82% less volatile than the S&P 500.

Summary

Flagstar Bancorp beats SEC BANCORP INC/SH SH on 9 of the 11 factors compared between the two stocks.

About Flagstar Bancorp

Flagstar Bancorp, Inc. operates as a savings and loan holding company for Flagstar Bank, FSB that provides commercial and consumer banking services to individuals and businesses in the United States. Its Community Banking segment offers various products, such as checking accounts, savings accounts, money market accounts, certificates of deposit, consumer and commercial loans, commercial real estate loans, equipment finance and leasing, home builder finance loans, and warehouse lines of credit. It also provides other financial services, including consumer and corporate card services, customized treasury management solutions, merchant services, and capital markets services, such as loan syndications, as well as wealth management products and services. This segment serves consumer, business, and mortgage lending customers through its branch banking, business and commercial banking, government banking, warehouse lending, and loans held-for-investment (LHFI) portfolio groups. The company's Mortgage Originations segment originates, acquires, and sells one-to-four family residential mortgage loans through mortgage branches, call centers, the Internet, and third party counterparties. Its Mortgage Servicing segment offers services and subservices mortgage loans; and the servicing of residential mortgages for its LHFI portfolio, as well as noninterest-bearing escrow services. As of December 31, 2018, the company provided banking services through 160 full service banking branches; and home loans through a wholesale network of brokers and correspondents in 50 states, as well as 75 retail locations in 24 states. Flagstar Bancorp, Inc. was founded in 1987 and is headquartered in Troy, Michigan.

About SEC BANCORP INC/SH SH

Security Bancorp, Inc. operates as the bank holding company for Security Federal Savings Bank that provides banking, financial, and mortgage services to individual and corporate customers primarily in Warren County, Tennessee. The company's deposit products include checking and savings accounts, and certificates of deposit. It also offers consumer loans; mortgage loans; and commercial loans, including installment loans and lines of credit, as well as provides trust services. In addition, the company provides wealth and financial management services that include mutual funds, stocks, and bonds; rollovers; personal and small business retirement plans; fixed, variable, and indexed annuities; life insurance; trust and estate services; and other plans, as well as online, mobile, and telephone banking services. It operates through three full-service bank locations and five ATM locations in Warren County. Security Bancorp, Inc. was founded in 1960 and is headquartered in McMinnville, Tennessee.

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