Security Federal (SFDL) AI Stock Analysis

• Market Cap: $112.84M
• Dividend Yield: 2.2%
• Average Volume (3M): 234.00
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.24
• Revenue Growth: 4.55%
• EPS Growth: 19.33%
• Country: US
• Employees: 258
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): N/A
• Shares Outstanding: 3,123,691
• 10 Day Avg. Volume: 135
• 30 Day Avg. Volume: 234
• PEG Ratio: -0.75
• Price to Book (P/B): 0.48
• Price to Sales (P/S): 1.01
• P/FCF Ratio: 3.39
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 1.16
• Enterprise Value/Gross Profit: 1.86
• Enterprise Value/Ebitda: 5.38
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: $38.00 ▲(13.26% Upside)
• Action: Reiterated Date: 11/18/25
• Date: Action: Reiterated 11/18/25

Security Federal's strong financial performance, characterized by robust revenue growth and financial stability, is the most significant factor driving the overall score. The stock's attractive valuation further enhances its appeal. Technical indicators suggest a neutral market sentiment, which slightly tempers the overall score.

Positive Factors

Low leverage / strong capitalization

A debt-to-equity of 0.21 signals a conservatively financed balance sheet that improves resilience to credit losses and interest-rate stress. Low leverage supports regulatory capital cushions, enables continued lending or strategic acquisitions, and preserves funding flexibility over the medium term.

Robust revenue growth

A 60.8% TTM revenue increase reflects sustained demand for the firm’s core banking products or successful expansion initiatives. If driven by recurring loan interest and fee income, this growth can compound earnings, fund reinvestment, and strengthen competitive position within the regional market over multiple quarters.

Strong cash conversion

High FCF growth and near-100% FCF-to-net-income indicate effective conversion of accounting earnings into cash. This durable cash generation supports dividends, internal investment, and debt reduction without heavy reliance on capital markets, enhancing financial flexibility and resilience across economic cycles.

Negative Factors

Low operational (EBIT) margin

A 4.4% EBIT margin points to limited operating efficiency despite healthy gross and net margins. Persistent low EBIT restricts the firm’s ability to absorb higher loan-loss provisions or fund growth initiatives from operating profits, making long-term profitability more sensitive to cost structure and revenue mix shifts.

Moderate return on equity

ROE of 6.77% indicates only modest shareholder returns relative to invested equity. Over time this may signal limited profitability leverage or cautious capital deployment, making it harder to generate superior equity returns without improving asset yields, margins, or selective leverage within risk limits.

Regional/community banking concentration

A community-focused regional model constrains geographic diversification and scale economics. That concentration can limit fee diversification and increase sensitivity to local economic cycles, potentially capping long-term growth unless the bank expands its footprint or broadens product offerings strategically.

Security Federal Business Overview & Revenue Model

Company Description

Security Federal Corporation operates as the bank holding company for Security Federal Bank that provides various banking products and services. It accepts various deposit products, such as savings accounts, checking accounts, various money market accounts, fixed interest rate certificates, negotiated rate jumbo certificates of deposit, and individual retirement accounts. The company also originates commercial real estate loans, commercial business loans, and consumer loans, as well as mortgage loans to buy or refinance one-to-four family residential real estate; and construction loans on single-family residences, multi-family dwellings and projects, and commercial real estate. In addition, it provides loans for the acquisition, development, and construction of residential subdivisions and commercial projects. Further, the company offers trust, financial planning, and financial management services; and operates an insurance agency that offers auto, business, life, health, and home insurance products, as well as provides insurance premium financing services. Additionally, it invests in various types of liquid assets, including U.S. Treasury obligations and securities of various federal agencies, certificates of deposit at insured institutions, mutual funds, bankers' acceptances and federal funds, as well as commercial paper and corporate debt securities. As of February 8, 2021, the company operated 17 full-service branch offices in Aiken, Ballentine, Clearwater, Columbia, Graniteville, Langley, Lexington, North Augusta, Ridge Spring, Wagener, and West Columbia, South Carolina; and Augusta and Evans, Georgia. Security Federal Corporation was founded in 1922 and is headquartered in Aiken, South Carolina.

How the Company Makes Money

Security Federal generates revenue through several key streams. Primarily, the company earns income from interest on loans and mortgages provided to customers, which constitutes a significant portion of its earnings. Additionally, SFDL earns fees from various banking services, including account maintenance, transaction fees, and wealth management services. The company may also engage in investment activities, generating income through interest and capital gains. Strategic partnerships with local businesses and financial institutions further enhance SFDL's revenue potential, allowing it to offer comprehensive financial solutions that attract and retain customers.

Security Federal Financial Statement Overview

Summary

Security Federal exhibits strong revenue growth and a stable financial position with low leverage. The company is effectively converting earnings into cash, although there is room for improvement in operational efficiency as indicated by the EBIT margin. Overall, the financial statements reflect a company on a positive growth trajectory with a solid foundation for future expansion.

Income Statement

Security Federal has demonstrated strong revenue growth with a TTM revenue growth rate of 60.8%, indicating robust expansion. The gross profit margin is healthy at 48.46%, and the net profit margin is solid at 15.33%. However, the EBIT margin is relatively low at 4.40%, suggesting room for improvement in operational efficiency. Overall, the income statement reflects a positive growth trajectory with stable profitability.

Balance Sheet

The balance sheet shows a strong equity position with a debt-to-equity ratio of 0.21, indicating low leverage and financial stability. The return on equity is moderate at 6.77%, reflecting decent profitability relative to shareholder equity. The equity ratio is not explicitly calculated, but the overall financial structure appears stable with a focus on equity financing.

Cash Flow

Cash flow analysis reveals a positive free cash flow growth rate of 7.85%, indicating improving cash generation capabilities. The free cash flow to net income ratio is high at 98.25%, suggesting effective conversion of earnings into cash. However, the operating cash flow to net income ratio is not available, which limits a comprehensive assessment of cash flow efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	87.73M	85.99M	72.93M	50.92M	48.55M	47.46M
Gross Profit	54.48M	49.15M	46.96M	45.90M	47.13M	37.27M
EBITDA	18.85M	15.11M	15.08M	15.29M	18.62M	10.88M
Net Income	12.80M	9.81M	10.19M	10.23M	12.77M	7.05M
Balance Sheet
Total Assets	1.61B	1.61B	1.55B	1.38B	1.30B	1.17B
Cash, Cash Equivalents and Short-Term Investments	289.34M	259.05M	177.77M	579.75M	711.57M	607.70M
Total Debt	40.21M	43.92M	52.28M	61.15M	64.23M	85.65M
Total Liabilities	1.42B	1.43B	1.38B	1.22B	1.19B	1.06B
Stockholders Equity	194.79M	182.39M	172.36M	160.23M	115.52M	111.91M
Cash Flow
Free Cash Flow	11.46M	25.67M	6.00M	17.18M	17.13M	8.12M
Operating Cash Flow	17.25M	28.43M	8.86M	21.87M	19.28M	9.36M
Investing Cash Flow	-118.05M	-26.68M	-58.48M	-136.97M	-136.09M	-196.24M
Financing Cash Flow	20.24M	48.24M	149.41M	115.98M	126.40M	192.37M

Security Federal Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 33.55
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SFDL, the sentiment is Positive. The current price of 33.55 is below the 20-day moving average (MA) of 34.32, above the 50-day MA of 33.55, and above the 200-day MA of 31.23, indicating a bullish trend. The MACD of 0.66 indicates Negative momentum. The RSI at 76.36 is Negative, neither overbought nor oversold. The STOCH value of 89.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SFDL.

Security Federal Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LSBK	78 Outperform	$119.31M	15.96	6.28%	2.12%	2.27%	66.15%
SFDL	72 Outperform	$112.84M	9.51	6.33%	2.20%	4.55%	19.33%
AUBN	69 Neutral	$84.20M	11.61	8.22%	4.16%	24.17%	739.42%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
IROQ	62 Neutral	$93.00M	17.37	6.20%	1.48%	1.93%	157.35%
PBHC	54 Neutral	$81.07M	-13.78	2.26%	2.86%	0.84%	―