OFG Bancorp (NYSE:OFG) versus Banner (NASDAQ:BANR) Financial Analysis

OFG Bancorp (NYSE:OFG) and Banner (NASDAQ:BANR) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
OFG Bancorp 21.14% 12.84% 1.28%
Banner 28.76% 10.68% 1.14%

Analyst Ratings

This is a summary of recent recommendations for OFG Bancorp and Banner, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OFG Bancorp 0 0 0 0 N/A
Banner 0 3 1 1 2.60

Banner has a consensus price target of $57.00, suggesting a potential upside of 10.53%. Given Banner’s higher probable upside, analysts plainly believe Banner is more favorable than OFG Bancorp.

Valuation & Earnings

This table compares OFG Bancorp and Banner’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OFG Bancorp $597.70 million 1.95 $74.33 million $1.47 15.33
Banner $617.76 million 2.88 $115.93 million $3.37 15.30

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

Risk and Volatility

OFG Bancorp has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500. Comparatively, Banner has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Dividends

OFG Bancorp pays an annual dividend of $0.32 per share and has a dividend yield of 1.4%. Banner pays an annual dividend of $1.64 per share and has a dividend yield of 3.2%. OFG Bancorp pays out 21.8% of its earnings in the form of a dividend. Banner pays out 48.7% 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. Banner has increased its dividend for 1 consecutive years. Banner is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

91.4% of OFG Bancorp shares are owned by institutional investors. Comparatively, 83.6% of Banner shares are owned by institutional investors. 2.5% of OFG Bancorp shares are owned by company insiders. Comparatively, 1.4% of Banner shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Banner beats OFG Bancorp on 11 of the 17 factors compared between the two stocks.

OFG Bancorp Company Profile

OFG Bancorp is a holding company, which engages in the provision of banking and financial services. It operates through the following segments: Banking, Wealth Management, and Treasury. The Banking segment includes its branches and traditional banking products such as deposits and commercial, consumer, and mortgage loans. The Wealth Management segment involves in financial planning, money management and investment banking, brokerage services, insurance sales activity, corporate and individual trust and retirement services, and retirement plan administration services. The Treasury segment encompasses all its asset and liability management activities, such as purchases and sales of investment securities, interest rate risk management, derivatives, and borrowings. The company was founded in 1964 and is headquartered in San Juan, Puerto Rico.

Banner Company Profile

Banner Corp. operates as a holding company for Banner Bank. It offers deposit services, business, commercial real estate, construction, residential, agricultural and consumer loans. It also provides commercial banking services and financial products to individuals, businesses and public sector entities. The company was founded in 1995 and is headquartered in Walla Walla, WA.

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