Security Federal (SFDL) AI Stock Analysis

• Market Cap: $109.61M
• Dividend Yield: 2.2%
• Average Volume (3M): 234.00
• Price to Earnings (P/E): 7.7
• Beta (1Y): 0.26
• 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: 0.20
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 1.17
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 1.14
• Enterprise Value/Gross Profit: 1.84
• Enterprise Value/Ebitda: 5.33
• 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: 69 Neutral
• Price Target: $38.00 ▲(13.26% Upside)
• Action: Downgraded Date: 03/21/26
• Date: Action: Downgraded 03/21/26

The score is driven by attractive valuation (low P/E with a ~2% dividend) and solid multi-year revenue growth with improved 2025 margins. These positives are tempered by balance-sheet data uncertainty for 2025 and signs of cash-flow volatility, while technicals point to a longer-term uptrend but muted near-term momentum.

Positive Factors

Revenue Growth

Multi-year revenue expansion through 2025 shows durable demand and successful business execution. Re-acceleration into 2025 indicates the company can regain growth momentum, supporting stable top-line prospects and providing a base for margin and cash-flow improvement over the medium term.

Improved 2025 Margins

A meaningful step-up in net and EBIT margins in 2025 suggests the company is realizing operating leverage or better pricing mix. If sustained, higher margin structure enhances cash generation, resilience to revenue volatility, and ability to reinvest or support shareholder returns over the next several quarters.

Stronger Leverage & FCF History

Material de-leveraging plus consistent positive free cash flow indicate improved balance-sheet resilience and financial flexibility. Lower leverage and recurring FCF support capital allocation options, reduce default risk, and underpin sustainable dividend or investment capacity over time.

Negative Factors

OCF Volatility

A sharp drop in operating cash flow despite positive free cash flow signals inconsistent cash conversion and potential earnings quality concerns. Persistent OCF volatility can strain liquidity planning, hinder predictable capital returns, and complicate funding of growth initiatives over multiple quarters.

Below-Peak Profitability

Margins and ROE materially below prior-cycle highs indicate reduced capital efficiency and constraints on long-term return generation. If structural drivers of the earlier peak aren’t restored, the company may face a lower long-run return profile and weaker ability to fund growth or dividends.

2025 Balance-Sheet Inconsistency

Apparent data inconsistencies in the latest balance sheet undermine confidence in leverage and liquidity assessments. Unclear or unreliable reporting elevates risk around capital adequacy and planning, making it harder for investors and management to assess long-term solvency and funding capacity.

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

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Security Federal Financial Statement Overview

Summary

Strong revenue growth through 2025 with improved 2025 profitability versus 2024. Offsetting this are profitability still below 2021–2022 peaks, volatility in operating cash flow (notably down in 2025 vs 2024), and a stated 2025 balance-sheet data inconsistency that reduces confidence in the latest leverage snapshot.

Income Statement

Revenue expanded strongly from 2022–2025, with 2025 reaching $90.1M and growth re-accelerating versus 2024. Profitability improved materially in 2025 (net margin ~15.2% vs ~11.4% in 2024), and EBIT margin also stepped up. However, margins remain below the very strong levels seen in 2021–2022, indicating some pressure/normalization versus earlier-cycle profitability.

Balance Sheet

Leverage improved meaningfully over time, with debt-to-equity declining from ~0.77 (2020) to ~0.24 (2024), supporting balance-sheet resilience. Return on equity has been steady in the mid-single-digits recently (~5%–6% in 2023–2025), but below the 2021 peak (~11%), suggesting reduced capital efficiency. Also, the 2025 balance sheet shows an apparent data inconsistency (total assets equaling equity and a 0.0 debt-to-equity figure despite $10M of debt), which adds uncertainty to the latest-year leverage picture.

Cash Flow

Cash generation is generally positive, with free cash flow positive every year shown and a strong rebound in 2024. 2025 shows free cash flow of $14.4M and very strong growth versus the prior year, but operating cash flow declined sharply versus 2024 (down from $28.4M to $14.4M), signaling potential volatility in cash conversion. Where available, free cash flow has covered a large portion of net income (roughly ~68%–90% in 2021–2024), which is supportive of earnings quality, though 2025 coverage metrics are not usable in the provided data.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	87.73M	90.14M	85.99M	72.93M	50.92M	48.55M
Gross Profit	54.48M	58.93M	49.15M	46.96M	45.90M	47.13M
EBITDA	18.85M	17.33M	15.11M	15.08M	15.29M	18.62M
Net Income	12.80M	13.67M	9.81M	10.19M	10.23M	12.77M
Balance Sheet
Total Assets	1.61B	210.96M	1.61B	1.55B	1.38B	1.30B
Cash, Cash Equivalents and Short-Term Investments	289.34M	66.42M	259.05M	177.77M	579.75M	711.57M
Total Debt	40.21M	10.00M	43.92M	52.28M	61.15M	64.23M
Total Liabilities	1.42B	0.00	1.43B	1.38B	1.22B	1.19B
Stockholders Equity	194.79M	210.96M	182.39M	172.36M	160.23M	115.52M
Cash Flow
Free Cash Flow	11.46M	14.38M	25.67M	6.00M	17.18M	17.13M
Operating Cash Flow	17.25M	14.38M	28.43M	8.86M	21.87M	19.28M
Investing Cash Flow	-118.05M	-101.26M	-26.68M	-58.48M	-136.97M	-136.09M
Financing Cash Flow	20.24M	-16.06M	48.24M	149.41M	115.98M	126.40M

Security Federal Technical Analysis

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

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 35.63, below the 50-day MA of 34.45, and above the 200-day MA of 31.72, indicating a neutral trend. The MACD of 0.29 indicates Positive momentum. The RSI at 49.09 is Neutral, neither overbought nor oversold. The STOCH value of 16.54 is Positive, 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	69 Neutral	$109.61M	7.70	6.33%	2.20%	4.55%	19.33%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
AUBN	66 Neutral	$73.40M	12.98	8.33%	4.16%	24.17%	739.42%
LSBK	63 Neutral	$114.92M	15.00	6.26%	2.12%	2.27%	66.15%
PBHC	54 Neutral	$79.96M	-25.99	-2.75%	2.86%	0.84%	―