Head-To-Head Analysis: OFG Bancorp (NYSE:OFG) and Orrstown Financial Services (NASDAQ:ORRF)

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

Valuation & Earnings

This table compares OFG Bancorp and Orrstown Financial Services’ top-line 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 2.26 $74.33 million $2.57 10.56
Orrstown Financial Services $127.94 million 2.19 $26.46 million $3.27 7.65

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

Institutional & Insider Ownership

91.2% of OFG Bancorp shares are owned by institutional investors. Comparatively, 42.2% of Orrstown Financial Services shares are owned by institutional investors. 2.5% of OFG Bancorp shares are owned by insiders. Comparatively, 4.1% of Orrstown Financial Services shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for OFG Bancorp and Orrstown Financial Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OFG Bancorp 0 0 1 0 3.00
Orrstown Financial Services 0 0 0 0 N/A

OFG Bancorp currently has a consensus target price of $31.00, indicating a potential upside of 14.18%. Given OFG Bancorp’s higher probable upside, equities research analysts clearly believe OFG Bancorp is more favorable than Orrstown Financial Services.

Risk and Volatility

OFG Bancorp has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Orrstown Financial Services has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.

Profitability

This table compares OFG Bancorp and Orrstown Financial Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OFG Bancorp 23.53% 13.99% 1.40%
Orrstown Financial Services 28.93% 14.00% 1.26%

Dividends

OFG Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.8%. Orrstown Financial Services pays an annual dividend of $0.76 per share and has a dividend yield of 3.0%. OFG Bancorp pays out 18.7% of its earnings in the form of a dividend. Orrstown Financial Services pays out 23.2% 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 increased its dividend for 2 consecutive years and Orrstown Financial Services has increased its dividend for 6 consecutive years. Orrstown Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

OFG Bancorp beats Orrstown Financial Services on 10 of the 16 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.

Orrstown Financial Services Company Profile

Orrstown Financial Services, Inc. is a holding company, which engages in the provision of consumer and business financial services. It also offers commercial banking and trust business services which involves accepting demand, time and savings deposits, and granting loans. The company was founded on November 17, 1987 and is headquartered in Shippensburg, PA.

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