Ocwen Financial Corporation (NYSE: OCN) and First Bank (NASDAQ:FRBA) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.

Dividends

First Bank pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Ocwen Financial Corporation does not pay a dividend. First Bank pays out 12.5% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Ocwen Financial Corporation and First Bank’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ocwen Financial Corporation $1.32 billion 0.28 $352.81 million ($0.62) -4.52
First Bank $31.35 million 5.99 $9.61 million $0.64 19.53

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

Profitability

This table compares Ocwen Financial Corporation and First Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ocwen Financial Corporation -5.95% -12.41% -1.01%
First Bank 17.19% N/A N/A

Volatility & Risk

Ocwen Financial Corporation has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500. Comparatively, First Bank has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.

Insider & Institutional Ownership

44.7% of Ocwen Financial Corporation shares are owned by institutional investors. Comparatively, 29.3% of First Bank shares are owned by institutional investors. 5.2% of Ocwen Financial Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Ocwen Financial Corporation and First Bank, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ocwen Financial Corporation 0 5 0 0 2.00
First Bank 0 0 1 0 3.00

Ocwen Financial Corporation currently has a consensus price target of $3.33, indicating a potential upside of 19.05%. First Bank has a consensus price target of $14.00, indicating a potential upside of 12.00%. Given Ocwen Financial Corporation’s higher possible upside, analysts clearly believe Ocwen Financial Corporation is more favorable than First Bank.

Summary

First Bank beats Ocwen Financial Corporation on 8 of the 15 factors compared between the two stocks.

Ocwen Financial Corporation Company Profile

Ocwen Financial Corporation is a financial services holding company. The Company, through its subsidiaries, originates and services loans. The Company’s segments include Servicing, Lending, and Corporate Items and Other. The Company’s Servicing segment consists of its residential servicing business. The Company’s Lending segment is focused on originating and purchasing conventional and government-insured residential forward and reverse mortgage loans. The Company’s Corporate Items and Other segment includes revenues and expenses of Automotive Capital Services (ACS) and its other business activities. Its servicing clients include some of the financial institutions in the United States, including the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), the Government National Mortgage Association (Ginnie Mae) and non-Agency residential mortgage-backed securities (RMBS) trusts.

First Bank Company Profile

First Bank is a commercial bank. The Company provides a range of lending, deposit and other financial products and services. It operates through Community Banking segment, which is engaged in providing a range of commercial and retail and related banking services. It offers a range of lending products to meet the needs of its customers located within its market areas, including commercial and industrial loans, commercial real estate loans (including owner-occupied, investor, construction and development and multi-family loans), residential real estate loans, and consumer and other loans. It offers a range of deposit instruments, including non-interest bearing demand deposits (such as checking accounts), interest bearing demand accounts, money market accounts, savings accounts and certificates of deposit. It operates over 10 branches located in Cranbury, Denville, Ewing, Flemington, Hamilton, Lawrence, Somerset, Randolph and Williamstown, New Jersey, and Trevose, Pennsylvania.

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