Meta Financial Group (NASDAQ: CASH) and Ocwen Financial Corporation (NYSE:OCN) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, dividends, analyst recommendations, risk, institutional ownership, earnings and valuation.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Meta Financial Group and Ocwen Financial Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Meta Financial Group 0 1 1 0 2.50
Ocwen Financial Corporation 0 5 0 0 2.00

Meta Financial Group presently has a consensus target price of $108.00, indicating a potential upside of 48.05%. Ocwen Financial Corporation has a consensus target price of $3.33, indicating a potential upside of 7.53%. Given Meta Financial Group’s stronger consensus rating and higher probable upside, research analysts plainly believe Meta Financial Group is more favorable than Ocwen Financial Corporation.

Insider and Institutional Ownership

74.2% of Meta Financial Group shares are held by institutional investors. Comparatively, 48.5% of Ocwen Financial Corporation shares are held by institutional investors. 6.1% of Meta Financial Group shares are held by company insiders. Comparatively, 5.2% of Ocwen Financial Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Meta Financial Group has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Ocwen Financial Corporation has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500.

Profitability

This table compares Meta Financial Group and Ocwen Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Meta Financial Group 18.74% 16.60% 1.58%
Ocwen Financial Corporation -5.95% -12.41% -1.01%

Dividends

Meta Financial Group pays an annual dividend of $0.52 per share and has a dividend yield of 0.7%. Ocwen Financial Corporation does not pay a dividend. Meta Financial Group pays out 9.8% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Meta Financial Group and Ocwen Financial Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Meta Financial Group $238.92 million 2.85 $49.55 million $5.30 13.76
Ocwen Financial Corporation $1.32 billion 0.31 $352.81 million ($0.62) -5.00

Ocwen Financial Corporation has higher revenue and earnings than Meta Financial Group. Ocwen Financial Corporation is trading at a lower price-to-earnings ratio than Meta Financial Group, indicating that it is currently the more affordable of the two stocks.

Summary

Meta Financial Group beats Ocwen Financial Corporation on 11 of the 15 factors compared between the two stocks.

Meta Financial Group Company Profile

Meta Financial Group, Inc. is a unitary savings and loan holding company. The Company operates through its banking subsidiary, MetaBank (the Bank). Its segments include Payments, Banking, and Corporate Services/Other. MetaBank is both a community-oriented financial institution offering a range of financial services to meet the needs of the communities it serves and a payments company providing services on a nationwide basis. It operates in both the banking and payments industries through MetaBank, its retail banking operation; Meta Payment Systems (MPS), its electronic payments division; AFS/IBEX Financial Services Inc. (AFS/IBEX), its insurance premium financing division, and Refund Advantage, EPS Financial, LLC (EPS) Financial and Specialty Consumer Services, its tax-related financial solutions divisions.

Ocwen Financial Corporation Company Profile

Ocwen Financial Corporation is a financial services holding company. The Company, through its subsidiaries, originates and services loans. The Company’s segments include Servicing, Lending, and Corporate Items and Other. The Company’s Servicing segment consists of its residential servicing business. The Company’s Lending segment is focused on originating and purchasing conventional and government-insured residential forward and reverse mortgage loans. The Company’s Corporate Items and Other segment includes revenues and expenses of Automotive Capital Services (ACS) and its other business activities. Its servicing clients include some of the financial institutions in the United States, including the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), the Government National Mortgage Association (Ginnie Mae) and non-Agency residential mortgage-backed securities (RMBS) trusts.

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