Financial Analysis: American Bank (OTCMKTS:AMBK) & OFG Bancorp (NYSE:OFG)

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

Dividends

American Bank pays an annual dividend of $0.56 per share and has a dividend yield of 3.3%. OFG Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 3.0%. American Bank pays out 26.7% of its earnings in the form of a dividend. OFG Bancorp pays out 26.2% 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. OFG Bancorp has raised its dividend for 5 consecutive years.

Earnings and Valuation

This table compares American Bank and OFG Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Bank	$59.94 million	1.88	$13.54 million	$2.10	8.15
OFG Bancorp	$902.28 million	1.94	$205.10 million	$4.58	8.68

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

Volatility and Risk

American Bank has a beta of 0.01, indicating that its stock price is 99% less volatile than the S&P 500. Comparatively, OFG Bancorp has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.

Institutional and Insider Ownership

92.7% of OFG Bancorp shares are owned by institutional investors. 2.2% of OFG Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Bank	0	0	0	0	0.00
OFG Bancorp	0	4	3	0	2.43

OFG Bancorp has a consensus price target of $45.83, suggesting a potential upside of 15.32%. Given OFG Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe OFG Bancorp is more favorable than American Bank.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
American Bank	22.58%	N/A	N/A
OFG Bancorp	22.72%	15.21%	1.69%

Summary

OFG Bancorp beats American Bank on 16 of the 17 factors compared between the two stocks.

About American Bank

American Bank Incorporated operates as the bank holding company for American Bank that provides various banking products and services to consumer, business, institutional, and governmental customers. It accepts a range of interest-bearing checking and money market accounts, savings accounts, certificates of deposit, and individual retirement accounts. The company also offers commercial, industrial, and other loans; commercial mortgage loans; commercial construction loans; residential mortgage loans; and consumer loans, including personal term loans, personal credit lines, automobile loans, home equity loans, and home equity lines of credit and loans. In addition, it provides online or mobile banking, automated teller machine, safe deposit box rental, and wire transfer services, as well as sells checks and checkbooks, and purchases investment securities. The company operates an office located in Allentown, Pennsylvania; and a loan production office in Blue Bell, Pennsylvania. The company was founded in 1997 and is based in Allentown, Pennsylvania.

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.