OFG Bancorp (NYSE: OFG) and Carolina Financial Corporation (NASDAQ:CARO) are both small-cap banks – nec companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, dividends, valuation, earnings, institutional ownership and profitability.

Profitability

This table compares OFG Bancorp and Carolina Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OFG Bancorp 11.92% 9.05% 1.08%
Carolina Financial Corporation 24.80% 11.46% 1.39%

Analyst Ratings

This is a summary of recent ratings for OFG Bancorp and Carolina Financial Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OFG Bancorp 0 2 1 0 2.33
Carolina Financial Corporation 0 1 3 0 2.75

OFG Bancorp currently has a consensus price target of $12.33, indicating a potential upside of 48.59%. Carolina Financial Corporation has a consensus price target of $38.50, indicating a potential upside of 6.32%. Given OFG Bancorp’s higher possible upside, analysts clearly believe OFG Bancorp is more favorable than Carolina Financial Corporation.

Valuation and Earnings

This table compares OFG Bancorp and Carolina Financial Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
OFG Bancorp $423.41 million 0.86 $59.18 million $0.80 10.38
Carolina Financial Corporation $90.21 million 8.45 $17.57 million $1.83 19.79

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

Dividends

OFG Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 2.9%. Carolina Financial Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. OFG Bancorp pays out 30.0% of its earnings in the form of a dividend. Carolina Financial Corporation pays out 8.7% 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. Carolina Financial Corporation has increased its dividend for 3 consecutive years.

Institutional & Insider Ownership

96.9% of OFG Bancorp shares are owned by institutional investors. Comparatively, 33.2% of Carolina Financial Corporation shares are owned by institutional investors. 2.6% of OFG Bancorp shares are owned by company insiders. Comparatively, 12.2% of Carolina Financial Corporation shares are owned 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.

Volatility & Risk

OFG Bancorp has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500. Comparatively, Carolina Financial Corporation has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500.

Summary

Carolina Financial Corporation beats OFG Bancorp on 11 of the 17 factors compared between the two stocks.

OFG Bancorp Company Profile

OFG Bancorp is a financial holding company. The Company is engaged in providing banking and financial services through its subsidiaries. The Company operates through three segments: Banking, Wealth Management and Treasury. The Company provides banking and financial services to its clients through a range of banking and financial solutions, including commercial, consumer, auto, and mortgage lending; checking and savings accounts; financial planning, insurance, financial service, and investment brokerage, and corporate and individual trust and retirement services. The Company provides these services through various subsidiaries, including a commercial bank, Oriental Bank; a securities broker-dealer, Oriental Financial Services Corp. (Oriental Financial Services); an insurance agency, Oriental Insurance, LLC (Oriental Insurance), and a retirement plan administrator, Oriental Pension Consultants, Inc. (OPC).

Carolina Financial Corporation Company Profile

Carolina Financial Corporation is a bank holding company. The Company operates through CresCom Bank (the Bank), a state-chartered commercial bank. The Company operates through three segments: community banking, wholesale mortgage banking (mortgage banking) and other. The Company’s community banking segment provides traditional banking services offered through CresCom Bank. The Company’s mortgage banking segment provides mortgage loan origination and servicing offered through Crescent Mortgage Company (Crescent Mortgage). The other segment provides managerial and operational support to the other business segments through Carolina Services and Carolina Financial. CresCom Bank provides a range of commercial and retail banking financial services to meet the financial needs of its customers through its branch network in South Carolina and North Carolina.

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