Timberland Bancorp (NASDAQ:TSBK) vs. Commerzbank (OTCMKTS:CRZBY) Critical Analysis

Commerzbank (OTCMKTS:CRZBY) and Timberland Bancorp (NASDAQ:TSBK) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, institutional ownership, valuation, dividends and analyst recommendations.

Insider and Institutional Ownership

65.5% of Timberland Bancorp shares are held by institutional investors. 3.6% of Timberland Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Commerzbank has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Timberland Bancorp has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.

Profitability

This table compares Commerzbank and Timberland Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Commerzbank	13.30%	8.89%	0.53%
Timberland Bancorp	26.46%	11.72%	1.55%

Valuation and Earnings

This table compares Commerzbank and Timberland Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Commerzbank	$26.54 billion	1.85	$2.97 billion	$3.04	15.39
Timberland Bancorp	$114.63 million	3.06	$29.16 million	$3.99	11.31

Commerzbank has higher revenue and earnings than Timberland Bancorp. Timberland Bancorp is trading at a lower price-to-earnings ratio than Commerzbank, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for Commerzbank and Timberland Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Commerzbank	0	3	5	1	2.78
Timberland Bancorp	0	0	0	1	4.00

Dividends

Commerzbank pays an annual dividend of $0.90 per share and has a dividend yield of 1.9%. Timberland Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. Commerzbank pays out 29.6% of its earnings in the form of a dividend. Timberland Bancorp pays out 30.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Timberland Bancorp has raised its dividend for 13 consecutive years. Timberland Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Timberland Bancorp beats Commerzbank on 10 of the 16 factors compared between the two stocks.

About Commerzbank

Commerzbank AG provides banking and capital market products and services to private and small business customers, corporate, financial service providers, and institutional clients in Germany, rest of Europe, the Americas, Asia, and internationally. It operates through two segments, Private and Small-Business Customers, and Corporate Clients. The company offers saving, checking, business, and current accounts; term deposits; pension; credit and debit cards; payment solutions; overdraft services; various loans; and insurance products. It also provides trade securities; treasury management; corporate financing; real estate financing; financing advisory; merger and acquisition; foreign trade; trade financing; asset and risk management; and online banking, as well as wealth management services. Commerzbank AG was founded in 1870 and is headquartered in Frankfurt am Main, Germany.

About Timberland Bancorp

Timberland Bancorp, Inc. operates as the bank holding company for Timberland Bank that provides various community banking services in Washington. It offers various deposit products, including money market deposit, checking, and regular savings accounts, as well as certificates of deposit. The company also provides one-to four-family residential, multi-family, and commercial real estate loans; and construction lending products, such as custom and owner/builder, speculative one- to four-family, commercial, multi-family, land development, and land development. In addition, it offers consumer loans comprising home equity lines of credit and second mortgage loans, automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans, and unsecured loans; and commercial business loans. Timberland Bancorp, Inc. was founded in 1915 and is headquartered in Hoquiam, Washington.