OceanFirst Financial (NASDAQ:OCFC) and WSFS Financial (NASDAQ:WSFS) Critical Analysis

OceanFirst Financial (NASDAQ:OCFC) and WSFS Financial (NASDAQ:WSFS) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.

Insider & Institutional Ownership

71.0% of OceanFirst Financial shares are owned by institutional investors. Comparatively, 88.5% of WSFS Financial shares are owned by institutional investors. 5.0% of OceanFirst Financial shares are owned by company insiders. Comparatively, 1.2% of WSFS Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares OceanFirst Financial and WSFS Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OceanFirst Financial	11.77%	5.02%	0.62%
WSFS Financial	20.44%	10.60%	1.36%

Valuation & Earnings

This table compares OceanFirst Financial and WSFS Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OceanFirst Financial	$692.36 million	1.64	$100.07 million	$1.29	15.32
WSFS Financial	$1.40 billion	2.22	$263.67 million	$4.85	11.74

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

Dividends

OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. WSFS Financial pays an annual dividend of $0.68 per share and has a dividend yield of 1.2%. OceanFirst Financial pays out 62.0% of its earnings in the form of a dividend. WSFS Financial pays out 14.0% 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. WSFS Financial has increased its dividend for 1 consecutive years.

Volatility and Risk

OceanFirst Financial has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, WSFS Financial has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for OceanFirst Financial and WSFS Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OceanFirst Financial	0	3	2	2	2.86
WSFS Financial	0	3	4	0	2.57

OceanFirst Financial presently has a consensus target price of $21.60, indicating a potential upside of 9.31%. WSFS Financial has a consensus target price of $65.40, indicating a potential upside of 14.90%. Given WSFS Financial’s higher possible upside, analysts plainly believe WSFS Financial is more favorable than OceanFirst Financial.

Summary

WSFS Financial beats OceanFirst Financial on 12 of the 18 factors compared between the two stocks.

About OceanFirst Financial

OceanFirst Financial Corp. operates as the bank holding company for OceanFirst Bank N.A. that provides community banking services to retail and commercial customers. It accepts money market accounts, savings accounts, interest-bearing checking accounts, non-interest-bearing accounts, and time deposits, that includes brokered deposits to retail, government, and business customers. The company also offers commercial real estate, multi-family, land loans, construction, and commercial and industrial loans; fixed-rate and adjustable-rate mortgage loans that are secured by one-to-four family residences; and consumer loans, such as home equity loans and lines of credit, student loans, overdraft line of credit, loans on savings accounts, and other consumer loans. In addition, it invests in mortgage-backed securities, securities issued by the U.S. Government and agencies, corporate securities, and other investments. Further, the company offers bankcard, trust and asset management services; and bank owned life insurance products. The company was founded in 1902 and is based in Red Bank, New Jersey.

About WSFS Financial

WSFS Financial Corporation operates as the savings and loan holding company for the Wilmington Savings Fund Society, FSB that provides various banking services in the United States. It operates through three segments: WSFS Bank, Cash Connect, and Wealth Management. It offers various deposit products, including savings accounts, demand deposits, interest-bearing demand deposits, money market deposit accounts, and certificates of deposit, as well as accepts jumbo certificates of deposit from individuals, businesses, and municipalities. The company also provides a range of loans, which comprise fixed and adjustable rate residential loans; commercial mortgage and commercial loans; commercial construction loans; commercial loans for working capital, financing equipment and real estate acquisitions, business expansion and other business purposes; and consumer credit products, such as home equity loans, home equity lines of credit, automobile loans, unsecured lines of credit, and other secured and unsecured personal installment loans. In addition, it offers insurance products; planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate and institutional clients; retail securities and insurance brokerage services; mortgage and title services; residential mortgage and refinancing solutions; and leases small equipment and fixed assets, as well as provides financial planning, customized investment strategies, brokerage products, fiduciary, and wealth management services. Further, the company provides ATM vault cash, smart safe, and other cash logistics services; and online reporting and ATM cash management, predictive cash ordering and reconcilement services, armored carrier management, loss protection, and deposit safe cash logistics services, as well as trustee, agency, bankruptcy administration, custodial and commercial domicile services. The company was founded in 1832 and is based in Wilmington, Delaware.