Brookline Bancorp (BRKL) & BofI (BOFI) Critical Review

Brookline Bancorp (NASDAQ:BRKL) and BofI (NASDAQ:BOFI) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Brookline Bancorp and BofI’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brookline Bancorp 19.97% 8.53% 1.03%
BofI 27.87% 17.79% 1.73%

Valuation & Earnings

This table compares Brookline Bancorp and BofI’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brookline Bancorp $295.22 million 4.33 $50.51 million $0.80 19.89
BofI $546.02 million 3.96 $152.41 million $2.48 13.87

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

Dividends

Brookline Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.5%. BofI does not pay a dividend. Brookline Bancorp pays out 50.0% of its earnings in the form of a dividend.

Volatility and Risk

Brookline Bancorp has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500. Comparatively, BofI has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500.

Insider & Institutional Ownership

75.8% of Brookline Bancorp shares are owned by institutional investors. Comparatively, 75.3% of BofI shares are owned by institutional investors. 2.5% of Brookline Bancorp shares are owned by company insiders. Comparatively, 6.5% of BofI shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Brookline Bancorp and BofI, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brookline Bancorp 0 3 0 0 2.00
BofI 0 2 7 0 2.78

Brookline Bancorp presently has a consensus target price of $17.50, suggesting a potential upside of 9.99%. BofI has a consensus target price of $41.63, suggesting a potential upside of 21.04%. Given BofI’s stronger consensus rating and higher possible upside, analysts clearly believe BofI is more favorable than Brookline Bancorp.

Summary

BofI beats Brookline Bancorp on 11 of the 16 factors compared between the two stocks.

Brookline Bancorp Company Profile

Brookline Bancorp, Inc. operates as the holding company for Brookline Bank, Bank Rhode Island, First Ipswich Bank, and Brookline Securities Corp that provide commercial, business, and retail banking services to corporate, municipal, and retail customers in the United States. Its deposit products include non-interest-bearing demand checking accounts, NOW accounts, savings accounts, and money market accounts. The company's loan portfolio comprises first mortgage loans secured by commercial, multi-family, and residential real estate properties; loans to business entities comprising commercial lines of credit; loans to condominium associations; loans and leases used to finance equipment used by small businesses; financing for construction and development projects; and home equity and other consumer loans. It also provides cash management, investment advisory, and online banking services, as well as invests in debt and equity securities. As of December 31, 2017, the Company operated 51 full-service banking offices in greater Boston, the north shore of Massachusetts, and Rhode Island. Brookline Bancorp, Inc. was founded in 1871 and is headquartered in Boston, Massachusetts.

BofI Company Profile

BofI Holding, Inc. operates as the holding company for BofI Federal Bank that provides consumer and business banking products in the United States. The company offers deposits products, including consumer and business checking, demand, savings, and time deposit accounts. It also provides single family and multifamily mortgage secured lending products; commercial real estate secured and commercial lending products; specialty finance factoring products; prime loans to customers secured by new and used automobiles; and term unsecured personal loans to individual borrowers, as well as overdraft lines of credit. In addition, the company offers prepaid card and refund transfer, debit card or ATM card, portfolio management, online bill payment, money transfer, overdraft protection, online and mobile banking, and text message banking services. BofI Holding, Inc. was incorporated in 1999 and is based in San Diego, California.

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