ESSA Bancorp (ESSA) versus The Competition Financial Review

ESSA Bancorp (NASDAQ: ESSA) is one of 35 public companies in the “Savings institutions, except federal” industry, but how does it contrast to its peers? We will compare ESSA Bancorp to related businesses based on the strength of its analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Profitability

This table compares ESSA Bancorp and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ESSA Bancorp 21.27% 8.27% 0.83%
ESSA Bancorp Competitors 17.07% 8.91% 0.95%

Institutional & Insider Ownership

44.7% of ESSA Bancorp shares are owned by institutional investors. Comparatively, 39.8% of shares of all “Savings institutions, except federal” companies are owned by institutional investors. 7.6% of ESSA Bancorp shares are owned by company insiders. Comparatively, 7.6% of shares of all “Savings institutions, except federal” companies are owned 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.

Dividends

ESSA Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.9%. ESSA Bancorp pays out 34.5% of its earnings in the form of a dividend. As a group, “Savings institutions, except federal” companies pay a dividend yield of 2.2% and pay out 28.2% of their earnings in the form of a dividend. ESSA Bancorp has raised its dividend for 1 consecutive years.

Volatility & Risk

ESSA Bancorp has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, ESSA Bancorp’s peers have a beta of 0.78, indicating that their average share price is 22% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for ESSA Bancorp and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ESSA Bancorp 0 1 0 0 2.00
ESSA Bancorp Competitors 108 412 243 12 2.21

ESSA Bancorp currently has a consensus price target of $15.00, suggesting a potential downside of 7.92%. As a group, “Savings institutions, except federal” companies have a potential downside of 7.29%. Given ESSA Bancorp’s peers stronger consensus rating and higher probable upside, analysts plainly believe ESSA Bancorp has less favorable growth aspects than its peers.

Valuation and Earnings

This table compares ESSA Bancorp and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
ESSA Bancorp $77.33 million $14.42 million 11.72
ESSA Bancorp Competitors $146.26 million $14.78 million 18.12

ESSA Bancorp’s peers have higher revenue and earnings than ESSA Bancorp. ESSA Bancorp is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

ESSA Bancorp peers beat ESSA Bancorp on 12 of the 15 factors compared.

ESSA Bancorp Company Profile

ESSA Bancorp, Inc. operates as a bank holding company for ESSA Bank & Trust that provides a range of financial products and services to individuals, families, and businesses in Pennsylvania. The company accepts savings accounts, interest bearing demand accounts, checking accounts, money market accounts, club accounts, certificates of deposit and IRAs, and other qualified plan accounts, as well as commercial checking accounts. Its loan portfolio includes first mortgage loans for the purchase, construction, or refinancing of one- to four-family residential real estate property; commercial real estate loans; home equity loans and lines of credit; and commercial and consumer loans, as well as loans secured by deposits and personal unsecured loans. In addition, the company offers insurance benefits consulting services, such as health insurance, life insurance, short term and long term disability, dental, vision, 401(K) retirement planning, and individual health products, as well as asset management and trust, and investment services. As of September 30, 2020, it operated 22 full-service banking offices, including 7 offices in Monroe County, 3 offices in Lehigh County, 6 offices in Northampton County, 1 office in Lackawanna County, 1 office in Luzerne County, 1 office in Chester County, 2 offices in Delaware County, and 1 office in Montgomery County, Pennsylvania. The company was founded in 1916 and is based in Stroudsburg, Pennsylvania.

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