OFG Bancorp (NYSE:OFG) versus Independent Bank (NASDAQ:IBCP) Financial Contrast

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

Analyst Recommendations

This is a summary of recent recommendations for Independent Bank and OFG Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	0	3	0	0	2.00
OFG Bancorp	0	0	1	0	3.00

Independent Bank presently has a consensus target price of $28.00, indicating a potential upside of 16.13%. OFG Bancorp has a consensus target price of $40.00, indicating a potential upside of 9.50%. Given Independent Bank’s higher probable upside, equities research analysts clearly believe Independent Bank is more favorable than OFG Bancorp.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$290.35 million	1.74	$59.07 million	$2.94	8.20
OFG Bancorp	$770.73 million	2.23	$181.87 million	$3.91	9.34

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

Dividends

Independent Bank pays an annual dividend of $0.96 per share and has a dividend yield of 4.0%. OFG Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.7%. Independent Bank pays out 32.7% of its earnings in the form of a dividend. OFG Bancorp pays out 25.6% 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.

Institutional & Insider Ownership

79.4% of Independent Bank shares are owned by institutional investors. Comparatively, 92.7% of OFG Bancorp shares are owned by institutional investors. 5.5% of Independent Bank shares are owned by insiders. Comparatively, 2.2% of OFG Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Independent Bank has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, OFG Bancorp has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Independent Bank	20.45%	16.55%	1.25%
OFG Bancorp	23.00%	16.10%	1.73%

Summary

OFG Bancorp beats Independent Bank on 12 of the 16 factors compared between the two stocks.

About Independent Bank

Independent Bank Corporation operates as the bank holding company for Independent Bank that provides commercial banking services to individuals and businesses in rural and suburban communities in Michigan. It offers checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending, and safe deposit box services. The company also provides title insurance services and investment services, as well as automatic teller machines, and internet and mobile banking services. In addition, it operates through branches, drive-thru facilities, and loan production offices. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.

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.