Critical Review: Umpqua (NASDAQ:UMPQ) versus Central Federal (NASDAQ:CFBK)

Umpqua (NASDAQ:UMPQ) and Central Federal (NASDAQ:CFBK) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Earnings & Valuation

This table compares Umpqua and Central Federal’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Umpqua $1.35 billion 2.69 $316.26 million $1.46 11.28
Central Federal $27.60 million 1.95 $4.27 million N/A N/A

Umpqua has higher revenue and earnings than Central Federal.

Risk and Volatility

Umpqua has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, Central Federal has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Dividends

Umpqua pays an annual dividend of $0.84 per share and has a dividend yield of 5.1%. Central Federal does not pay a dividend. Umpqua pays out 57.5% of its earnings in the form of a dividend. Umpqua has raised its dividend for 8 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Umpqua and Central Federal, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Umpqua 0 3 2 0 2.40
Central Federal 0 0 0 0 N/A

Umpqua presently has a consensus target price of $19.25, indicating a potential upside of 16.88%. Given Umpqua’s higher possible upside, equities analysts clearly believe Umpqua is more favorable than Central Federal.

Insider & Institutional Ownership

86.5% of Umpqua shares are held by institutional investors. Comparatively, 23.0% of Central Federal shares are held by institutional investors. 0.4% of Umpqua shares are held by insiders. Comparatively, 18.6% of Central Federal shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Umpqua and Central Federal’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Umpqua 25.09% 8.71% 1.31%
Central Federal 17.47% 13.45% 0.93%

Summary

Umpqua beats Central Federal on 12 of the 15 factors compared between the two stocks.

Umpqua Company Profile

Umpqua Holdings Corporation operates as the holding company of Umpqua Bank that provides commercial and retail banking, and retail brokerage services. It operates through four segments: Wholesale Bank, Wealth Management, Retail Bank, and Home Lending. The company offers deposit products, including non-interest bearing checking, interest bearing checking and savings, and money market accounts, as well as certificates of deposit. It also provides loans for corporate and commercial customers, such as accounts receivable and inventory financing, multi-family and equipment loans, commercial equipment leases, international trade, real estate construction loans, permanent financing products, and small business administration program financing, as well as capital markets and treasury management services. In addition, the company offers loan products for small businesses; commercial and industrial loans; residential real estate loans for the construction, purchase, and refinancing of residential owner-occupied and rental properties; and consumer loans comprising secured and unsecured personal loans, home equity and personal lines of credit, and motor vehicle loans. Further, it provides financial planning, trust, and investment services; treasury and cash management services; retail brokerage and investment advisory services; and digital, mobile, telephone, text, and online banking services. The company serves middle market corporate, commercial, and business banking customers; individual investors; and high net worth individuals. As of December 31, 2018, it operated commercial banking centers in 299 locations in Oregon, Washington, California, Idaho, and Nevada. The company was founded in 1953 and is headquartered in Portland, Oregon.

Central Federal Company Profile

Central Federal Corporation operates as the bank holding company for CFBank, National Association that provides various banking products and services in the United States. The company accepts savings, retail and business checking, and money market accounts, as well as certificates of deposit. It also offers single-family mortgage loans; commercial real estate and multi-family residential mortgage loans; commercial loans; construction and land loans; and consumer loans, such as home equity lines of credit, automobile loans, home improvement loans, and loans secured by deposits, as well as other loans. In addition, the company provides Internet and mobile banking, remote deposit, and corporate treasury management services. As of December 31, 2018, it operated five branch offices located in Franklin, Hamilton, Summit, and Columbiana Counties; and a loan production office located in Franklin County; and an agency office located in Cuyahoga County, Ohio. Central Federal Corporation was founded in 1892 and is based in Worthington, Ohio.

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