Analyzing Bank OZK (NASDAQ:OZK) and OFG Bancorp (NYSE:OFG)

OFG Bancorp (NYSE:OFG) and Bank OZK (NASDAQ:OZK) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.

Institutional and Insider Ownership

92.7% of OFG Bancorp shares are owned by institutional investors. Comparatively, 86.2% of Bank OZK shares are owned by institutional investors. 3.1% of OFG Bancorp shares are owned by company insiders. Comparatively, 6.7% of Bank OZK shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

OFG Bancorp has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Bank OZK has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500.

Dividends

OFG Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.5%. Bank OZK pays an annual dividend of $1.64 per share and has a dividend yield of 3.7%. OFG Bancorp pays out 24.3% of its earnings in the form of a dividend. Bank OZK pays out 27.0% 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. Bank OZK has raised its dividend for 28 consecutive years. Bank OZK is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares OFG Bancorp and Bank OZK’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OFG Bancorp	22.68%	15.69%	1.72%
Bank OZK	26.07%	14.38%	1.99%

Analyst Ratings

This is a summary of recent ratings and recommmendations for OFG Bancorp and Bank OZK, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OFG Bancorp	0	0	3	0	3.00
Bank OZK	2	6	1	0	1.89

OFG Bancorp currently has a consensus target price of $48.67, suggesting a potential upside of 22.25%. Bank OZK has a consensus target price of $48.50, suggesting a potential upside of 10.86%. Given OFG Bancorp’s stronger consensus rating and higher probable upside, equities research analysts clearly believe OFG Bancorp is more favorable than Bank OZK.

Valuation and Earnings

This table compares OFG Bancorp and Bank OZK”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OFG Bancorp	$770.73 million	2.40	$181.87 million	$4.11	9.68
Bank OZK	$2.25 billion	2.21	$690.78 million	$6.08	7.22

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

Summary

Bank OZK beats OFG Bancorp on 9 of the 17 factors compared between the two stocks.

About OFG Bancorp

OFG Bancorp, a financial holding company, provides a range of banking and financial services. It operates through three segments: Banking, Wealth Management, and Treasury. The company offers checking and savings accounts, and individual retirement accounts; certificate of deposits, as well as time deposit products; commercial, consumer, auto leasing, and mortgage lending services; credit cards; cash management; financial planning and insurance services; and corporate and individual trust, and retirement services. In addition, it provides securities brokerage and investment advisory services, including various investment alternatives, such as tax-advantaged fixed income securities, mutual funds, stocks, and bonds to retail and institutional clients; and separately-managed accounts and mutual fund asset allocation programs. Further, the company engages in the insurance agency and reinsurance businesses; administration and servicing of retirement plans; and various treasury-related functions with an investment portfolio consisting of mortgage-backed securities, obligations of U.S. government sponsored agencies, and U.S. Treasury securities and money market instruments. Additionally, it offers money management and investment banking services; and engages in the asset/liability management activities, such as purchases and sales of investment securities, interest rate risk management, derivatives, and borrowings. The company provides investment brokerage, transactional, international trade financing, residential mortgage, and consumer finance services. OFG Bancorp was founded in 1964 and is headquartered in San Juan, Puerto Rico.

About Bank OZK

Bank OZK provides various retail and commercial banking services for individuals and businesses in the United States. The company offers deposit services, including non-interest bearing checking, interest bearing transaction, business sweep, savings, money market, individual retirement, and other accounts, as well as time and reciprocal deposits. It also provides trust and wealth services, such as personal trusts, custodial accounts, investment management accounts, and retirement accounts, as well as corporate trust services, including trustee, paying agent and registered transfer agent services, and other related services. In addition, the company offers treasury management services comprising automated clearing house, wire transfer, transaction reporting, wholesale lockbox, remote deposit capture, automated credit line transfer, reconciliation, positive pay, commercial card, and other services, as well as zero balance and investment sweep accounts. Further, it provides real estate, consumer, small business, indirect recreational vehicle and marine, equipment, agricultural, commercial and industrial, government guaranteed, lines of credit, homebuilder, and affordable housing loans; lender and structured, business aviation, and subscription financing services; and mortgage and other lending products. Additionally, the company offers ATMs; telephone, online, and mobile banking services; credit and debit cards; safe deposit boxes; and other products and services. The company was formerly known as Bank of the Ozarks and changed its name to Bank OZK in July 2018. Bank OZK was founded in 1903 and is headquartered in Little Rock, Arkansas.