Critical Review: OceanFirst Financial (NASDAQ:OCFC) versus Ameris Bancorp (NYSE:ABCB)

Ameris Bancorp (NYSE:ABCB) and OceanFirst Financial (NASDAQ:OCFC) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Volatility and Risk

Ameris Bancorp has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, OceanFirst Financial has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ameris Bancorp	0	4	4	0	2.50
OceanFirst Financial	0	4	0	0	2.00

Ameris Bancorp currently has a consensus target price of $90.50, suggesting a potential upside of 8.57%. OceanFirst Financial has a consensus target price of $19.00, suggesting a potential upside of 4.08%. Given Ameris Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Ameris Bancorp is more favorable than OceanFirst Financial.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ameris Bancorp	22.47%	10.81%	1.57%
OceanFirst Financial	5.28%	6.55%	0.72%

Earnings & Valuation

This table compares Ameris Bancorp and OceanFirst Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ameris Bancorp	$1.24 billion	4.52	$412.15 million	$5.72	14.57
OceanFirst Financial	$519.89 million	3.39	$70.98 million	$0.72	25.35

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

Institutional & Insider Ownership

91.6% of Ameris Bancorp shares are owned by institutional investors. Comparatively, 71.0% of OceanFirst Financial shares are owned by institutional investors. 5.7% of Ameris Bancorp shares are owned by insiders. Comparatively, 5.4% of OceanFirst Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Ameris Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 1.0%. OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.4%. Ameris Bancorp pays out 14.0% of its earnings in the form of a dividend. OceanFirst Financial pays out 111.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Ameris Bancorp beats OceanFirst Financial on 13 of the 16 factors compared between the two stocks.

About Ameris Bancorp

Ameris Bancorp operates as the bank holding company for Ameris Bank that provides range of banking services to retail and commercial customers. It operates through five segments: Banking Division, Retail Mortgage Division, Warehouse Lending Division, SBA Division, and Premium Finance Division. The company offers commercial and retail checking, regular interest-bearing savings, money market, individual retirement, and certificates of deposit accounts. It also provides commercial real estate, residential real estate mortgage, agricultural, and commercial and industrial loans; consumer loans, including motor vehicle, home improvement, and home equity loans, as well as loans secured by savings accounts and personal credit lines. In addition, the company originates, administers, and services commercial insurance premium loans, equipment finance loans, and small business administration loans. It operates full service domestic banking offices, and mortgage and loan production offices. The company was founded in 1971 and is headquartered in Atlanta, Georgia.

About OceanFirst Financial

OceanFirst Financial Corp. operates as the bank holding company for OceanFirst Bank N.A. that provides community banking services to retail and commercial customers. It accepts money market accounts, savings accounts, interest-bearing checking accounts, non-interest-bearing accounts, and time deposits, that includes brokered deposits to retail, government, and business customers. The company also offers commercial real estate, multi-family, land loans, construction, and commercial and industrial loans; fixed-rate and adjustable-rate mortgage loans that are secured by one-to-four family residences; and 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. In addition, it invests in mortgage-backed securities, securities issued by the U.S. Government and agencies, corporate securities, and other investments. Further, the company offers bankcard, trust and asset management services; and bank owned life insurance products. The company was founded in 1902 and is based in Red Bank, New Jersey.