Oritani Financial (NASDAQ:ORIT) and Independent Bank Group (NASDAQ:IBTX) Critical Comparison

Oritani Financial (NASDAQ:ORIT) and Independent Bank Group (NASDAQ:IBTX) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Dividends

Oritani Financial pays an annual dividend of $1.00 per share and has a dividend yield of 5.8%. Independent Bank Group pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. Oritani Financial pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Independent Bank Group pays out 22.4% of its earnings in the form of a dividend. Independent Bank Group has raised its dividend for 5 consecutive years.

Insider & Institutional Ownership

68.0% of Oritani Financial shares are owned by institutional investors. Comparatively, 61.1% of Independent Bank Group shares are owned by institutional investors. 10.2% of Oritani Financial shares are owned by insiders. Comparatively, 10.9% of Independent Bank Group 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.

Earnings & Valuation

This table compares Oritani Financial and Independent Bank Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Oritani Financial $156.41 million 4.98 $42.89 million $1.15 15.03
Independent Bank Group $449.51 million 5.42 $128.26 million $4.46 12.51

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Oritani Financial and Independent Bank Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oritani Financial 0 0 1 0 3.00
Independent Bank Group 0 1 3 0 2.75

Oritani Financial currently has a consensus target price of $19.00, indicating a potential upside of 9.95%. Independent Bank Group has a consensus target price of $68.00, indicating a potential upside of 21.91%. Given Independent Bank Group’s higher possible upside, analysts plainly believe Independent Bank Group is more favorable than Oritani Financial.

Profitability

This table compares Oritani Financial and Independent Bank Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Oritani Financial 33.03% 9.68% 1.28%
Independent Bank Group 26.04% 8.92% 1.41%

Volatility and Risk

Oritani Financial has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Independent Bank Group has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500.

Summary

Independent Bank Group beats Oritani Financial on 11 of the 17 factors compared between the two stocks.

About Oritani Financial

Oritani Financial Corp. operates as a savings and loan holding company for Oritani Bank that provides various banking services for individual and corporate customers. The company accepts a range of deposit products, such as non-interest and interest-bearing demand and NOW checking accounts, money market deposit accounts, savings accounts, retirement accounts, and time deposits. Its loan products include residential commercial real estate loans comprising mortgage loans secured by apartment buildings; commercial real estate loans, consisting of mortgage loans secured by retail anchor shopping centers, commercial offices, retail space, warehouses, and mixed-use buildings; residential real estate loans, such as one to four family residential real property and home equity loans; and second mortgage and equity loans, and home equity lines of credit, as well as construction loans. The company also invests in securities and real estate properties. As of June 30, 2018, it operated 25 full service branches in Bergen, Hudson, Essex, and Passaic counties, New Jersey; and lending offices in New York City and Cherry Hill, New Jersey. Oritani Financial Corp. was founded in 1911 and is headquartered in Washington Township, New Jersey.

About Independent Bank Group

Independent Bank Group, Inc. operates as the bank holding company for Independent Bank that provides various commercial banking products and services to businesses, professionals, and individuals in the United States. It offers various deposit products, including demand deposits, money market accounts, and certificates of deposit. The company also provides commercial real estate loans; commercial construction, land, and land development loans; residential real estate loans; single-family interim construction loans; commercial loans comprising SBA guaranteed loans, business term loans, equipment financing, and lines of credit and energy related loans; agricultural loans for farmers and ranchers; consumer installment loans comprising loans to purchase cars, boats, and other recreational vehicles; and residential mortgages. In addition, it offers debit cards, online and mobile banking, eStatement, bank-by-mail, and direct deposit services; and business accounts and management services, including analyzed business checking, business savings, and treasury management services. As of December 31, 2018, the company operated 73 branches. Independent Bank Group, Inc. was founded in 2002 and is headquartered in McKinney, Texas.

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