Financial Comparison: OFG Bancorp (NYSE:OFG) and West Bancorporation (NASDAQ:WTBA)

West Bancorporation (NASDAQ:WTBA) and OFG Bancorp (NYSE:OFG) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
West Bancorporation	18.75%	15.48%	1.03%
OFG Bancorp	24.08%	15.92%	1.80%

Insider and Institutional Ownership

44.3% of West Bancorporation shares are held by institutional investors. Comparatively, 92.7% of OFG Bancorp shares are held by institutional investors. 4.6% of West Bancorporation shares are held by company insiders. Comparatively, 1.2% of OFG Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for West Bancorporation and OFG Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Bancorporation	0	3	1	0	2.25
OFG Bancorp	0	4	2	1	2.57

West Bancorporation currently has a consensus target price of $29.00, indicating a potential downside of 0.99%. OFG Bancorp has a consensus target price of $55.20, indicating a potential upside of 3.78%. Given OFG Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe OFG Bancorp is more favorable than West Bancorporation.

Risk & Volatility

West Bancorporation has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, OFG Bancorp has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Dividends

West Bancorporation pays an annual dividend of $1.04 per share and has a dividend yield of 3.6%. OFG Bancorp pays an annual dividend of $1.40 per share and has a dividend yield of 2.6%. West Bancorporation pays out 46.6% of its earnings in the form of a dividend. OFG Bancorp pays out 27.6% 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 increased its dividend for 5 consecutive years.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Bancorporation	$202.45 million	2.47	$32.56 million	$2.23	13.13
OFG Bancorp	$902.28 million	2.49	$205.10 million	$5.08	10.47

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

Summary

OFG Bancorp beats West Bancorporation on 14 of the 18 factors compared between the two stocks.

About West Bancorporation

West Bancorporation, Inc. operates as the financial holding company provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers deposit services, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers online and mobile banking, treasury management services including cash management, client-generated automated clearing house transactions, remote deposit, and fraud protection services; merchant credit card processing and corporate credit cards; and administration of estates, conservatorships, personal trusts, and agency accounts. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.

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.