Head to Head Review: OFG Bancorp (OFG) and Bank of Marin Bancorp (BMRC)

OFG Bancorp (NYSE: OFG) and Bank of Marin Bancorp (NASDAQ:BMRC) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.

Volatility and Risk

OFG Bancorp has a beta of 1.71, suggesting that its stock price is 71% more volatile than the S&P 500. Comparatively, Bank of Marin Bancorp has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Earnings & Valuation

This table compares OFG Bancorp and Bank of Marin Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OFG Bancorp $424.33 million 1.57 $52.64 million $1.33 11.39
Bank of Marin Bancorp $84.86 million 6.67 $15.97 million $3.28 24.73

OFG Bancorp has higher revenue and earnings than Bank of Marin Bancorp. OFG Bancorp is trading at a lower price-to-earnings ratio than Bank of Marin Bancorp, 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 1.6%. Bank of Marin Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 1.5%. OFG Bancorp pays out 18.0% of its earnings in the form of a dividend. Bank of Marin Bancorp pays out 37.8% 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. OFG Bancorp has increased its dividend for 4 consecutive years and Bank of Marin Bancorp has increased its dividend for 9 consecutive years. OFG Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares OFG Bancorp and Bank of Marin Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OFG Bancorp 12.93% 9.80% 1.20%
Bank of Marin Bancorp 19.93% 8.30% 0.97%

Insider & Institutional Ownership

96.7% of OFG Bancorp shares are held by institutional investors. Comparatively, 43.5% of Bank of Marin Bancorp shares are held by institutional investors. 2.4% of OFG Bancorp shares are held by company insiders. Comparatively, 5.2% of Bank of Marin Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for OFG Bancorp and Bank of Marin Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OFG Bancorp 0 0 3 0 3.00
Bank of Marin Bancorp 0 3 0 0 2.00

OFG Bancorp presently has a consensus target price of $11.17, suggesting a potential downside of 26.29%. Bank of Marin Bancorp has a consensus target price of $75.67, suggesting a potential downside of 6.70%. Given Bank of Marin Bancorp’s higher probable upside, analysts clearly believe Bank of Marin Bancorp is more favorable than OFG Bancorp.

Summary

OFG Bancorp beats Bank of Marin Bancorp on 10 of the 17 factors compared between the two stocks.

About OFG Bancorp

OFG Bancorp, a financial holding company, provides various banking and financial services. It operates in three segments: Banking, Wealth Management, and Treasury. The company offers checking and savings accounts, as well as time deposit products; commercial, consumer, auto, and mortgage lending products; and financial planning, investment brokerage, corporate and individual trust, and retirement services. It also offers securities brokerage services, including various investment alternatives, such as tax-advantaged fixed income securities, mutual funds, stocks, and bonds to retail and institutional clients; separately-managed accounts and mutual fund asset allocation programs; and pension administration and other financial services. In addition, the company is involved in the management and participation in public offerings and private placements of debt and equity securities; insurance agency business; and administration of retirement plans. Further, it is involved in various treasury-related functions with an investment portfolio consisting of mortgage-backed securities, obligations of U.S. government sponsored agencies, Puerto Rico government and agency obligations, and money market instruments. The company operates through a network of 48 branches in Puerto Rico. OFG Bancorp was founded in 1964 and is based in San Juan, Puerto Rico.

About Bank of Marin Bancorp

Bank of Marin Bancorp operates as the holding company for Bank of Marin that provides a range of financial services primarily to professionals, small and middle-market businesses, individuals, and not-for-profit organizations in California, the United States. The company offers personal and business checking and savings accounts; and time certificates of deposit, individual retirement accounts, health savings accounts, and demand deposit marketplace accounts, as well as certificate of deposit account registry and insured cash sweep services. It also provides commercial real estate, commercial and industrial, and consumer loans, as well as construction financing and home equity lines of credit. In addition, the company offers merchant card and cash management sweep services; credit cards; mobile deposit, remote deposit capture, automated clearing house, and image lockbox services, as well as wire transfers; fraud detection tools; cash management solutions; and valet pick-up service for non-cash deposits. Further, it provides wealth management and trust services comprising customized investment portfolio management, trust administration, estate settlement, and custody services, as well as 401(k) plan services; and automated teller machines, and telephone and Internet banking services. The company operates 23 offices in Marin, Sonoma, San Francisco, Napa, and Alameda counties. Bank of Marin Bancorp was founded in 1989 and is headquartered in Novato, California.

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