Contrasting Citigroup (NYSE:C) & OceanFirst Financial (NASDAQ:OCFC)

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OceanFirst Financial	$641.60 million	1.35	$104.03 million	$1.71	8.65
Citigroup	$156.82 billion	0.75	$9.23 billion	$3.38	18.22

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

Institutional and Insider Ownership

71.0% of OceanFirst Financial shares are held by institutional investors. Comparatively, 71.7% of Citigroup shares are held by institutional investors. 5.0% of OceanFirst Financial shares are held by company insiders. Comparatively, 0.1% of Citigroup shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for OceanFirst Financial and Citigroup, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OceanFirst Financial	0	4	1	0	2.20
Citigroup	1	5	10	0	2.56

OceanFirst Financial currently has a consensus target price of $18.00, indicating a potential upside of 21.70%. Citigroup has a consensus target price of $65.03, indicating a potential upside of 5.61%. Given OceanFirst Financial’s higher probable upside, research analysts plainly believe OceanFirst Financial is more favorable than Citigroup.

Risk and Volatility

OceanFirst Financial has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500. Comparatively, Citigroup has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OceanFirst Financial	15.54%	6.17%	0.75%
Citigroup	4.90%	6.17%	0.49%

Dividends

OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 5.4%. Citigroup pays an annual dividend of $2.12 per share and has a dividend yield of 3.4%. OceanFirst Financial pays out 46.8% of its earnings in the form of a dividend. Citigroup pays out 62.7% 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. OceanFirst Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Citigroup beats OceanFirst Financial on 8 of the 15 factors compared between the two stocks.

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.

About Citigroup

Citigroup Inc., a diversified financial service holding company, provides various financial product and services to consumers, corporations, governments, and institutions worldwide. It operates through five segments: Services, Markets, Banking, U.S. Personal Banking, and Wealth. The Services segment includes Treasury and Trade Solutions, which provides cash management, trade, and working capital solutions to multinational corporations, financial institutions, and public sector organizations; and Securities Services, such as cross-border support for clients, local market expertise, post-trade technologies, data solutions, and various securities services solutions. The Markets segment offers sales and trading services for equities, foreign exchange, rates, spread products, and commodities to corporate, institutional, and public sector clients; and market-making services, including asset classes, risk management solutions, financing, prime brokerage, research, securities clearing, and settlement. The banking segment includes investment banking; advisory services related to mergers and acquisitions, divestitures, restructurings, and corporate defense activities; and corporate lending, which includes corporate and commercial banking. The U.S. Personal Banking segment provides co-branded cards and retail banking services. The Wealth segment provides financial services to high-net-worth clients through banking, lending, mortgages, investment, custody, and trust product offerings; and to professional industries, including law firms, consulting groups, accounting, and asset management. The company was founded in 1812 and is headquartered in New York, New York.