Kearny Financial (NASDAQ: KRNY) and Malvern Bancorp (NASDAQ:MLVF) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitabiliy, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.
Profitability
This table compares Kearny Financial and Malvern Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Kearny Financial | 12.37% | 1.68% | 0.40% |
| Malvern Bancorp | 37.03% | 6.71% | 0.73% |
Earnings & Valuation
This table compares Kearny Financial and Malvern Bancorp’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Kearny Financial | $108.54 million | 10.97 | $17.30 million | $0.21 | 68.81 |
| Malvern Bancorp | $22.67 million | 7.13 | $12.43 million | $1.93 | 13.01 |
Kearny Financial has higher revenue and earnings than Malvern Bancorp. Malvern Bancorp is trading at a lower price-to-earnings ratio than Kearny Financial, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
66.8% of Kearny Financial shares are held by institutional investors. Comparatively, 58.1% of Malvern Bancorp shares are held by institutional investors. 2.7% of Kearny Financial shares are held by company insiders. Comparatively, 3.2% of Malvern Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Kearny Financial and Malvern Bancorp, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Kearny Financial | 1 | 0 | 1 | 0 | 2.00 |
| Malvern Bancorp | 0 | 1 | 0 | 0 | 2.00 |
Kearny Financial presently has a consensus target price of $15.00, indicating a potential upside of 3.81%. Malvern Bancorp has a consensus target price of $24.00, indicating a potential downside of 4.38%. Given Kearny Financial’s higher probable upside, analysts clearly believe Kearny Financial is more favorable than Malvern Bancorp.
Dividends
Kearny Financial pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. Malvern Bancorp does not pay a dividend. Kearny Financial pays out 57.1% of its earnings in the form of a dividend.
Summary
Kearny Financial beats Malvern Bancorp on 8 of the 14 factors compared between the two stocks.
About Kearny Financial
Kearny Bank is principally engaged in the business of attracting deposits from the general public at its 41 locations in New Jersey and using these deposits, together with other funds, to originate or purchase loans for its portfolio and invest in securities. Loans originated or purchased by the Bank generally include loans collateralized by residential and commercial real estate augmented by secured and unsecured loans to businesses and consumers. The investment securities purchased by the Bank generally include United States agency mortgage-backed securities, United States government and agency debentures and bank-qualified municipal obligations.
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