Analyzing Oritani Financial (NASDAQ:ORIT) and Spirit of Texas Bancshares (NASDAQ:STXB)

Oritani Financial (NASDAQ:ORIT) and Spirit of Texas Bancshares (NASDAQ:STXB) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Institutional & Insider Ownership

68.3% of Oritani Financial shares are held by institutional investors. Comparatively, 35.9% of Spirit of Texas Bancshares shares are held by institutional investors. 10.2% of Oritani Financial shares are held by insiders. Comparatively, 15.0% of Spirit of Texas Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Oritani Financial and Spirit of Texas Bancshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Oritani Financial $160.51 million 5.23 $52.06 million $1.18 15.76
Spirit of Texas Bancshares $109.83 million 1.83 $21.14 million $1.40 8.26

Oritani Financial has higher revenue and earnings than Spirit of Texas Bancshares. Spirit of Texas Bancshares is trading at a lower price-to-earnings ratio than Oritani Financial, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Oritani Financial has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, Spirit of Texas Bancshares has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Profitability

This table compares Oritani Financial and Spirit of Texas Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Oritani Financial 31.46% 9.63% 1.26%
Spirit of Texas Bancshares 18.69% 7.12% 0.97%

Analyst Recommendations

This is a summary of recent ratings and price targets for Oritani Financial and Spirit of Texas Bancshares, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oritani Financial 0 0 0 0 N/A
Spirit of Texas Bancshares 0 1 0 0 2.00

Spirit of Texas Bancshares has a consensus target price of $26.00, suggesting a potential upside of 124.72%. Given Spirit of Texas Bancshares’ higher probable upside, analysts clearly believe Spirit of Texas Bancshares is more favorable than Oritani Financial.

Summary

Oritani Financial beats Spirit of Texas Bancshares on 8 of the 12 factors compared between the two stocks.

About Oritani Financial

Oritani Financial Corp. operates as a savings and loan holding company for Oritani Bank that provides various banking services for individual and corporate customers. The company accepts a range of deposit products, such as non-interest and interest-bearing demand and NOW checking accounts, money market deposit accounts, savings accounts, retirement accounts, and time deposits. Its loan products include residential commercial real estate loans comprising mortgage loans secured by apartment buildings; commercial real estate loans, consisting of mortgage loans secured by retail anchor shopping centers, commercial offices, retail space, warehouses, and mixed-use buildings; residential real estate loans, such as one to four family residential real property and home equity loans; and second mortgage and equity loans, and home equity lines of credit, as well as construction loans. The company also invests in securities and real estate properties. As of June 30, 2018, it operated 25 full service branches in Bergen, Hudson, Essex, and Passaic counties, New Jersey; and lending offices in New York City and Cherry Hill, New Jersey. Oritani Financial Corp. was founded in 1911 and is headquartered in Washington Township, New Jersey.

About Spirit of Texas Bancshares

Spirit of Texas Bancshares, Inc. operates as the holding company for Spirit of Texas Bank SSB that provides various commercial and retail banking services to small and medium-sized businesses and individuals. It offers checking accounts, money market accounts, savings accounts, certificates of deposit, and IRA accounts. The company also provides commercial and industrial loans; 1-4 single family residential real estate loans; construction, land, and development loans; commercial real estate loans, such as owner-occupied commercial real estate loans, other commercial real estate loans, and multifamily loans and farmland; consumer loans and leases; and municipal and other loans. In addition, it offers debit and credit cards, safe deposit boxes, wire transfer and treasury management services, and online banking services; and invests in U.S. Treasury bills and notes, as well as in securities of federally sponsored agencies, such as Federal Home Loan Bank bonds. The company operates through a network of 23 full-service branches located in the Houston, Dallas/Fort Worth, and Bryan/College Station metropolitan areas, as well as North Central Texas. Spirit of Texas Bancshares, Inc. was founded in 2008 and is headquartered in Conroe, Texas.

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