Kentucky First Federal Bancorp (NASDAQ:KFFB) & HSBC (NASDAQ:HSBC) Critical Review

Kentucky First Federal Bancorp (NASDAQ:KFFB) and HSBC (NYSE:HSBC) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitability, institutional ownership and earnings.

Institutional & Insider Ownership

2.8% of Kentucky First Federal Bancorp shares are held by institutional investors. Comparatively, 2.3% of HSBC shares are held by institutional investors. 5.0% of Kentucky First Federal Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Kentucky First Federal Bancorp and HSBC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kentucky First Federal Bancorp 0 0 0 0 N/A
HSBC 7 5 1 0 1.54

HSBC has a consensus price target of $40.59, suggesting a potential upside of 5.59%. Given HSBC’s higher possible upside, analysts plainly believe HSBC is more favorable than Kentucky First Federal Bancorp.

Risk & Volatility

Kentucky First Federal Bancorp has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500. Comparatively, HSBC has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Dividends

Kentucky First Federal Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 5.3%. HSBC pays an annual dividend of $1.98 per share and has a dividend yield of 5.2%. HSBC pays out 62.9% of its earnings in the form of a dividend.

Profitability

This table compares Kentucky First Federal Bancorp and HSBC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kentucky First Federal Bancorp 6.31% 1.22% 0.25%
HSBC 23.48% 6.65% 0.49%

Valuation and Earnings

This table compares Kentucky First Federal Bancorp and HSBC’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kentucky First Federal Bancorp $12.94 million 4.85 $810,000.00 N/A N/A
HSBC $53.78 billion 2.90 $12.70 billion $3.15 12.20

HSBC has higher revenue and earnings than Kentucky First Federal Bancorp.

Summary

HSBC beats Kentucky First Federal Bancorp on 8 of the 14 factors compared between the two stocks.

Kentucky First Federal Bancorp Company Profile

Kentucky First Federal Bancorp operates as the holding company for First Federal Savings and Loan Association of Hazard, and Frankfort First Bancorp, Inc. that provide various banking products and services in Kentucky. Its deposit products include passbook savings and certificate accounts, checking accounts, and individual retirement accounts. The company's loan portfolio comprises one-to four-family residential mortgage loans; construction loans; mortgage loans secured by multi-family property; nonresidential loans that are secured by commercial office buildings, churches, and properties used for other purposes; commercial non-mortgage loans; and consumer loans, such as home equity lines of credit, loans secured by savings deposits, automobile loans, and unsecured or personal loans. In addition, it invests in mortgage-backed securities; and provides insurance products and services. As of October 19, 2018, it operated through seven banking offices. The company was incorporated in 2005 and is based in Hazard, Kentucky. Kentucky First Federal Bancorp is a subsidiary of First Federal Mutual Holding Company.

HSBC Company Profile

HSBC Holdings plc provides banking and financial products and services. The company operates through Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking segments. The Retail Banking and Wealth Management segment offers personal banking products and services, mortgages and loans, credit cards, insurance and investment products, savings products, international services, and wealth solutions and financial planning services, as well as telephone, Internet, and mobile banking services. The Commercial Banking segment provides services and financing for buyers and suppliers in the trade cycle; liquidity and cash management services; capital financing, including debt, equity, and advisory services; and insurance and investment products, such as business and financial protection, trade insurance, employee benefits, corporate wealth management, and other commercial risk insurance products to small enterprises, mid-market companies, and multinationals. The Global Banking and Markets segment is involved in the provision of advisory, financing, prime, research and analysis, securities, trading and sales, and transaction banking services to corporates, financial institutions, and resources and energy groups. The Global Private Banking segment provides private banking, and investment and wealth management services to business owners, entrepreneurs, and senior executives and their families. As of January 14, 2019, the company operated approximately 3,800 offices in 66 countries and territories worldwide. HSBC Holdings plc was founded in 1865 and is headquartered in London, the United Kingdom.

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