Analyzing Kearny Financial (NASDAQ:KRNY) and OceanFirst Financial (NASDAQ:OCFC)

Kearny Financial (NASDAQ:KRNY) and OceanFirst Financial (NASDAQ:OCFC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.

Earnings & Valuation

This table compares Kearny Financial and OceanFirst Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kearny Financial $250.89 million 4.69 $42.14 million N/A N/A
OceanFirst Financial $311.48 million 3.45 $71.93 million $1.98 10.63



OceanFirst Financial has higher revenue and earnings than Kearny Financial.

Dividends

Kearny Financial pays an annual dividend of $0.24 per share and has a dividend yield of 1.9%. OceanFirst Financial pays an annual dividend of $0.68 per share and has a dividend yield of 3.2%. OceanFirst Financial pays out 34.3% of its earnings in the form of a dividend. OceanFirst Financial has raised its dividend for 5 consecutive years. OceanFirst Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Kearny Financial 16.80% 3.64% 0.65%
OceanFirst Financial 27.15% 9.53% 1.32%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Kearny Financial and OceanFirst Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kearny Financial 0 1 0 0 2.00
OceanFirst Financial 0 4 2 0 2.33

Kearny Financial presently has a consensus price target of $12.50, indicating a potential downside of 1.19%. OceanFirst Financial has a consensus price target of $25.25, indicating a potential upside of 20.01%. Given OceanFirst Financial’s stronger consensus rating and higher possible upside, analysts plainly believe OceanFirst Financial is more favorable than Kearny Financial.

Institutional and Insider Ownership

63.0% of Kearny Financial shares are held by institutional investors. Comparatively, 68.6% of OceanFirst Financial shares are held by institutional investors. 3.6% of Kearny Financial shares are held by company insiders. Comparatively, 3.6% of OceanFirst Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Kearny Financial has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, OceanFirst Financial has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500.

Summary

OceanFirst Financial beats Kearny Financial on 12 of the 16 factors compared between the two stocks.

About Kearny Financial

Kearny Financial Corp. operates as the holding company for Kearny Bank that provides various banking products and services in the United States. The company offers various deposit products, including interest-bearing and non-interest-bearing checking accounts, money market deposit accounts, savings accounts, and certificates of deposit accounts. It also provides various loans, such as one-to-four family mortgage loans; commercial mortgages, including loans secured by multi-family, mixed-use, and nonresidential properties; secured and unsecured business loans; consumer loans, such as home equity loans, home equity lines of credit, account loans, overdraft lines of credit, vehicle loans, personal loans, and loans secured by savings accounts and certificates of deposit; and construction loans to builders/developers and individual homeowners. In addition, the company engages in investment activities. As of August 15, 2018, it operated a total of 54 retail branch offices located throughout northern and central New Jersey, and Brooklyn and Staten Island, New York. The company was founded in 1884 and is headquartered in Fairfield, New Jersey.

About OceanFirst Financial

OceanFirst Financial Corp. operates as the holding company for OceanFirst Bank N.A. that provides a range of community banking services. The company offers various deposit products to retail, government, and business customers, including money market accounts, savings accounts, interest-bearing checking accounts, non-interest-bearing accounts, and time deposits. It also provides commercial real estate, multi-family mortgage, and land loans; fixed-rate and adjustable-rate mortgage loans that are secured by one-to-four family residences; 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; and commercial and industrial loans, and lines of credit. In addition, the company invests in mortgage-backed securities, securities issued by the U.S. Government and agencies, corporate securities, and other investments. Further, it offers bankcard and wealth management services; and sells alternative investment products and life insurance products. The company operates through its branch office in Toms River; administrative office located in Red Bank; and 58 additional branch offices and 3 deposit production facilities located throughout central and southern New Jersey, as well as commercial loan production offices in New York City, the Philadelphia area and Atlantic, Cape May, and Mercer Counties in New Jersey. OceanFirst Financial Corp. was founded in 1902 and is based in Red Bank, New Jersey.

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