Security Federal (SFDL) AI Stock Analysis

• Market Cap: $98.80M
• Dividend Yield: 1.81%
• Average Volume (3M): 433.00
• Price to Earnings (P/E): 10.2
• Beta (1Y): 0.36
• Revenue Growth: 7.85%
• EPS Growth: 5.37%
• Country: US
• Employees: 258
• Sector: Financial
• Sector Strength: 72
• Industry: Banks - Regional
• EPS (TTM): 0.75
• Shares Outstanding: 3,187,218
• 10 Day Avg. Volume: 906
• 30 Day Avg. Volume: 433
• PEG Ratio: 0.89
• Price to Book (P/B): 0.51
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.44
• Enterprise Value/Market Cap: 0.02
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: 0.02
• Enterprise Value/Ebitda: 0.03
• 1Y Price Target: $32.00
• Price Target Upside: 2.50% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 70 Neutral
• Price Target: $32.00 ▲(2.50%Upside)

Security Federal's strong financial performance, characterized by impressive revenue growth and profitability, is its biggest strength. Valuation metrics suggest the stock may be undervalued, offering potential upside. Technical indicators show positive momentum, although cash flow challenges remain a concern.

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 makes money primarily through the interest rate spread, which is the difference between the interest earned on loans and the interest paid on deposits. Additionally, the company generates revenue from fees associated with account maintenance, transaction services, overdrafts, and wealth management. Mortgage originations and refinancing also contribute to the company's earnings. Security Federal may also engage in investment activities, leveraging its financial assets to generate additional income. The company's partnerships with other financial institutions and service providers further enhance its revenue streams by expanding its service offerings and customer base.

Security Federal Financial Statement Overview

Summary

Security Federal demonstrates strong revenue growth and profitability, with sound financial management and a stable balance sheet. Despite challenges in cash flow, the company maintains a strong equity position and low leverage, which is suitable for future growth.

Income Statement

Security Federal shows strong profitability with a notable gross profit margin of 88.14% and a net profit margin of 12.77% for TTM. The revenue growth rate is impressive at 71.34% from the previous year, demonstrating robust business expansion. However, the EBIT margin has decreased from previous periods, indicating pressure on operational efficiency.

Balance Sheet

The company maintains a conservative balance sheet with a low debt-to-equity ratio of 0.21 and a strong equity ratio of 11.87% as of TTM. Positive return on equity at 5.88% reflects effective use of equity, though slightly lower than past performance. The increase in stockholders' equity suggests financial stability, though the overall asset growth is modest.

Cash Flow

Cash flow from operations is healthy, with a high operating cash flow to net income ratio of 1.66, indicating good cash generation relative to profits. Free cash flow growth rate is negative at -41.98%, indicating potential challenges in sustaining cash reserves for future investments. However, free cash flow remains positive, supporting operational needs.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	50.52M	48.39M	47.16M	45.93M	48.00M
Gross Profit	49.15M	48.39M	47.16M	45.93M	41.94M
EBITDA	15.11M	12.04M	15.29M	14.46M	10.88M
Net Income	9.81M	10.19M	10.23M	12.77M	7.05M
Balance Sheet
Total Assets	1.61B	1.55B	1.38B	1.30B	1.17B
Cash, Cash Equivalents and Short-Term Investments	259.05M	177.77M	579.75M	710.47M	607.83M
Total Debt	43.92M	52.28M	61.15M	64.23M	85.65M
Total Liabilities	1.43B	1.38B	1.22B	1.19B	1.06B
Stockholders Equity	182.39M	172.36M	160.23M	115.52M	111.91M
Cash Flow
Free Cash Flow	25.67M	6.00M	17.18M	12.01M	11.71M
Operating Cash Flow	28.43M	8.86M	21.87M	19.28M	9.36M
Investing Cash Flow	-26.68M	-58.48M	-136.97M	-136.09M	-196.24M
Financing Cash Flow	48.24M	149.41M	115.98M	126.40M	192.37M

Security Federal Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 31.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 31.22 is above the 20-day moving average (MA) of 30.39, above the 50-day MA of 29.96, and above the 200-day MA of 28.49, indicating a bullish trend. The MACD of 0.20 indicates Positive momentum. The RSI at 60.35 is Neutral, neither overbought nor oversold. The STOCH value of 64.58 is Neutral, 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
SFDL	70 Neutral	$98.80M	10.19	6.33%	1.81%	7.85%	5.37%
PROV	69 Neutral	$100.38M	16.30	4.84%	3.69%	2.53%	-12.02%
Sector *	67 Neutral	$17.06B	11.24	9.31%	3.84%	11.08%	-3.39%
PBHC	67 Neutral	$91.39M	31.55	1.84%	2.63%	11.12%	53.85%
BSBK	56 Neutral	$106.02M	―	-0.25%	―	-9.96%	-23.54%
WMPN	53 Neutral	$113.45M	―	-0.81%	0.97%	2.25%	-261.40%
FNWB	43 Neutral	$74.01M	―	-6.59%	3.57%	10.23%	-109.60%

Security Federal Corporate Events

Security Federal Holds Virtual Annual Meeting

On May 8, 2025, Security Federal Corporation held its Annual Meeting virtually, with a quorum present as 2,437,383 shares were represented out of 3,186,093 outstanding shares. During the meeting, Thomas L. Moore, J. Chris Verenes, Richard T. Harmon, and Frampton W. Toole, III were elected as directors for a three-year term, and the compensation of the company’s named executive officers was approved by shareholders.