Reviewing Berkshire Hills Bancorp (NYSE:BHLB) & OceanFirst Financial (NASDAQ:OCFC)

OceanFirst Financial (NASDAQ:OCFC) and Berkshire Hills Bancorp (NYSE:BHLB) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, institutional ownership, profitability and risk.

Profitability

This table compares OceanFirst Financial and Berkshire Hills Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OceanFirst Financial	12.89%	5.22%	0.66%
Berkshire Hills Bancorp	15.93%	9.45%	0.92%

Valuation and Earnings

This table compares OceanFirst Financial and Berkshire Hills Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OceanFirst Financial	$385.13 million	2.71	$100.07 million	$1.41	12.91
Berkshire Hills Bancorp	$696.05 million	1.77	$61.00 million	$2.56	10.40

OceanFirst Financial has higher earnings, but lower revenue than Berkshire Hills Bancorp. Berkshire Hills Bancorp is trading at a lower price-to-earnings ratio than OceanFirst Financial, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

OceanFirst Financial has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, Berkshire Hills Bancorp has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for OceanFirst Financial and Berkshire Hills Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OceanFirst Financial	0	4	1	1	2.50
Berkshire Hills Bancorp	0	2	0	2	3.00

OceanFirst Financial currently has a consensus price target of $20.67, indicating a potential upside of 13.55%. Berkshire Hills Bancorp has a consensus price target of $32.75, indicating a potential upside of 23.05%. Given Berkshire Hills Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Berkshire Hills Bancorp is more favorable than OceanFirst Financial.

Institutional & Insider Ownership

71.0% of OceanFirst Financial shares are owned by institutional investors. Comparatively, 83.1% of Berkshire Hills Bancorp shares are owned by institutional investors. 5.0% of OceanFirst Financial shares are owned by company insiders. Comparatively, 1.0% of Berkshire Hills Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.4%. Berkshire Hills Bancorp pays an annual dividend of $0.72 per share and has a dividend yield of 2.7%. OceanFirst Financial pays out 56.7% of its earnings in the form of a dividend. Berkshire Hills Bancorp pays out 28.1% 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.

Summary

Berkshire Hills Bancorp beats OceanFirst Financial on 10 of the 17 factors compared between the two stocks.

About OceanFirst Financial

OceanFirst Financial Corp. operates as the bank holding company for OceanFirst Bank N.A. that provides community banking services to retail and commercial customers. It accepts money market accounts, savings accounts, interest-bearing checking accounts, non-interest-bearing accounts, and time deposits, that includes brokered deposits to retail, government, and business customers. The company also offers commercial real estate, multi-family, land loans, construction, and commercial and industrial loans; fixed-rate and adjustable-rate mortgage loans that are secured by one-to-four family residences; and consumer loans, such as home equity loans and lines of credit, student loans, overdraft line of credit, loans on savings accounts, and other consumer loans. In addition, it invests in mortgage-backed securities, securities issued by the U.S. Government and agencies, corporate securities, and other investments. Further, the company offers bankcard, trust and asset management services; and bank owned life insurance products. The company was founded in 1902 and is based in Red Bank, New Jersey.

About Berkshire Hills Bancorp

Berkshire Hills Bancorp, Inc. operates as the bank holding company for Berkshire Bank that provides various banking products and services in the United States. The company provides various deposit accounts, including demand deposit, interest-bearing checking, regular savings, money market savings, time certificates of deposit, and retirement deposit accounts. It offers loans, such as commercial real estate, commercial and industrial, residential mortgage, and consumer loans. In addition, the company provides wealth management services comprising investment management, trust administration, tax return preparation, and financial planning; and investment products and brokerage services. Further, it offers commercial cash management, online banking and mobile banking, small business banking, and asset based lending services; and debit cards and other electronic fee producing payment services to transaction account customers. It serves its products to personal, commercial, non-profit, and municipal deposit customers. Berkshire Hills Bancorp, Inc. was founded in 1846 and is headquartered in Boston, Massachusetts.