TFS Financial (NASDAQ: TFSL – Get Rating) and OceanFirst Financial (NASDAQ: OCFC – Get Rating) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.
Profitability:
This table compares TFS Financial and OceanFirst Financial’s net margins, return on equity and return on assets.
| Net Margins: | Return on Equity: | Return on Assets: | |
| TFS Financial: | 15.97% | 3.75% | 0.46% |
| OceanFirst Financial: | 26.57% | 7.69% | 0.99% |
Dividends:
TFS Financial pays an annual dividend of $ 1.13 per share and has a dividend yield of 8.3%. OceanFirst Financial pays an annual dividend of $ 0.68 per share and has a dividend yield of 3.6%. TFS Financial pays out 470.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. OceanFirst Financial pays out 40.7% of its earnings in the form of a dividend. TFS Financial has increased its dividend for 7 consecutive years. TFS Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings:
This table compares TFS Financial and OceanFirst Financial’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue: | Price / Sales Ratio: | Net Income: | Earnings Per Share: | Price / Earnings Ratio: | |
| TFS Financial: | $ 444.65 million: | 8.63: | $ 81.01 million: | $ 0.24: | 56.92: |
| OceanFirst Financial: | $ 394.02 million: | 2.87: | $ 110.08 million: | $ 1.67: | 11.42: |
OceanFirst Financial has lower revenue, but higher earnings than TFS Financial. OceanFirst Financial is trading at a lower price-to-earnings ratio than TFS Financial, indicating that it is currently the most affordable of the two stocks.
Risk and Volatility:
TFS Financial has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, OceanFirst Financial has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.
Institutional and Insider Ownership:
8.8% of TFS Financial shares are held by institutional investors. Comparatively, 69.5% of OceanFirst Financial shares are held by institutional investors. 1.3% of TFS Financial shares are held by insiders. Comparatively, 4.5% of OceanFirst Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Analyst Recommendations:
This is a summary of current ratings and recommmendations for TFS Financial and OceanFirst Financial, as provided by MarketBeat.
| Sell Ratings: | Hold Ratings: | Buy Ratings: | Strong Buy Ratings: | Rating Score: | |
| TFS Financial: | 0: | 0: | 0: | 0: | N / A: |
| OceanFirst Financial: | 0: | 1: | 2: | 0: | 2.67: |
OceanFirst Financial has a consensus price target of $ 24.50, suggesting a potential upside of 28.47%. Given OceanFirst Financial’s higher possible upside, analysts plainly believe OceanFirst Financial is more favorable than TFS Financial.
Summary:
OceanFirst Financial beats TFS Financial on 11 of the 16 factors compared between the two stocks.
TFS Financial Company Profile: (Get Rating)
TFS Financial Corporation, through its subsidiaries, provides retail consumer banking services in the United States. Its deposit products include savings, money market, checking, individual retirement, and other qualified plan accounts, as well as certificates of deposit. The company 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, it offers escrow and settlement services. The company provides its products and services through its main office in Cleveland, Ohio; and 37 full-service branches and 7 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 operates as a subsidiary of Third Federal Savings and Loan Association of Cleveland, MHC.
OceanFirst Financial Company Profile: (Get Rating)
OceanFirst Financial Corp. operates as the bank holding company for OceanFirst Bank NA that provides community banking services. It accepts money market accounts, savings accounts, interest-bearing checking accounts, non-interest-bearing demand deposits, and time deposits to retail, government, and business customers. The company also offers commercial real estate, multi-family, land loans, construction, and commercial and industrial loans; fixed-rate and adjustable-rate mortgage loans that are secured by one-to-four family residences; and consumer loans, such as home equity loans and lines of credit, student loans, overdraft line of credit, loans on savings accounts, and other consumer loans. In addition, it invests in mortgage-backed securities, securities issued by the US Government and agencies, corporate securities, and other investments. Further, the company offers bankcard, wealth management, and trust and asset management services; and sells alternative investment products and life insurance products. As of December 31, 2021, it operated through its branch office in Toms River; administrative office located in Red Bank and Mount Laurel; 46 additional branch offices and four deposit production facilities located throughout central and southern New Jersey; and commercial loan production offices in New Jersey, New York City, the Philadelphia area, Baltimore, and Boston. The company was founded in 1902 and is based in Red Bank, New Jersey.
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