OFG Bancorp (NYSE:OFG) and Central Pacific Financial (NYSE:CPF) Critical Comparison

OFG Bancorp (NYSE:OFG) and Central Pacific Financial (NYSE:CPF) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, institutional ownership, dividends, earnings, analyst recommendations and valuation.

Institutional and Insider Ownership

92.7% of OFG Bancorp shares are owned by institutional investors. Comparatively, 88.4% of Central Pacific Financial shares are owned by institutional investors. 3.1% of OFG Bancorp shares are owned by company insiders. Comparatively, 2.7% of Central Pacific Financial shares are owned 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.

Dividends

OFG Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Central Pacific Financial pays an annual dividend of $1.04 per share and has a dividend yield of 3.7%. OFG Bancorp pays out 25.6% of its earnings in the form of a dividend. Central Pacific Financial pays out 50.7% 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.

Earnings and Valuation

This table compares OFG Bancorp and Central Pacific Financial’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OFG Bancorp	$658.56 million	3.24	$181.87 million	$3.91	11.61
Central Pacific Financial	$244.08 million	3.11	$58.67 million	$2.05	13.69

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for OFG Bancorp and Central Pacific Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OFG Bancorp	0	0	3	0	3.00
Central Pacific Financial	0	0	1	0	3.00

OFG Bancorp currently has a consensus price target of $49.33, suggesting a potential upside of 8.69%. Central Pacific Financial has a consensus price target of $24.00, suggesting a potential downside of 14.47%. Given OFG Bancorp’s higher possible upside, research analysts clearly believe OFG Bancorp is more favorable than Central Pacific Financial.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OFG Bancorp	22.95%	16.25%	1.75%
Central Pacific Financial	16.44%	11.36%	0.75%

Volatility & Risk

OFG Bancorp has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, Central Pacific Financial has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.

Summary

OFG Bancorp beats Central Pacific Financial on 12 of the 15 factors compared between the two stocks.

About OFG Bancorp

OFG Bancorp, a financial holding company, provides a range of banking and financial services. It operates through three segments: Banking, Wealth Management, and Treasury. The company offers checking and savings accounts, and individual retirement accounts; certificate of deposits, as well as time deposit products; commercial, consumer, auto leasing, and mortgage lending services; credit cards; cash management; financial planning and insurance services; and corporate and individual trust, and retirement services. In addition, it provides securities brokerage and investment advisory services, including various investment alternatives, such as tax-advantaged fixed income securities, mutual funds, stocks, and bonds to retail and institutional clients; and separately-managed accounts and mutual fund asset allocation programs. Further, the company engages in the insurance agency and reinsurance businesses; administration and servicing of retirement plans; and various treasury-related functions with an investment portfolio consisting of mortgage-backed securities, obligations of U.S. government sponsored agencies, and U.S. Treasury securities and money market instruments. Additionally, it offers money management and investment banking services; and engages in the asset/liability management activities, such as purchases and sales of investment securities, interest rate risk management, derivatives, and borrowings. The company provides investment brokerage, transactional, international trade financing, residential mortgage, and consumer finance services. OFG Bancorp was founded in 1964 and is headquartered in San Juan, Puerto Rico.

About Central Pacific Financial

Central Pacific Financial Corp. operates as the bank holding company for Central Pacific Bank that provides a range of commercial banking products and services to businesses, professionals, and individuals in the United States. It offers various deposit products and services, including checking, savings and time deposits, cash management and digital banking, trust, and retail brokerage services, as well as money market accounts and certificates of deposit. The company also provides various lending activities, such as commercial, commercial and residential mortgage, home equity, and consumer loans; and other products and services comprising debit cards, internet and mobile banking, cash management services, full-service ATMs, safe deposit boxes, international banking services, night depository facilities, foreign exchange, and wire transfers. In addition, it offers wealth management products and services that include non-deposit investment products, annuities, insurance, investment management, asset custody and general consultation, and planning services. The company was founded in 1954 and is headquartered in Honolulu, Hawaii.