Critical Comparison: OFG Bancorp (NYSE:OFG) versus Parke Bancorp (NASDAQ:PKBK)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OFG Bancorp	22.26%	15.18%	1.67%
Parke Bancorp	23.95%	11.07%	1.58%

Analyst Recommendations

This is a breakdown of current ratings for OFG Bancorp and Parke Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OFG Bancorp	1	1	5	0	2.57
Parke Bancorp	0	0	1	0	3.00

OFG Bancorp presently has a consensus target price of $47.17, indicating a potential upside of 13.93%. Given OFG Bancorp’s higher probable upside, equities research analysts plainly believe OFG Bancorp is more favorable than Parke Bancorp.

Earnings & Valuation

This table compares OFG Bancorp and Parke Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OFG Bancorp	$873.53 million	2.08	$198.17 million	$4.40	9.41
Parke Bancorp	$129.41 million	2.24	$27.51 million	$2.84	8.80

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

Risk and Volatility

OFG Bancorp has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Parke Bancorp has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.

Dividends

OFG Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. Parke Bancorp pays an annual dividend of $0.72 per share and has a dividend yield of 2.9%. OFG Bancorp pays out 27.3% of its earnings in the form of a dividend. Parke Bancorp pays out 25.4% 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. OFG Bancorp has increased its dividend for 5 consecutive years. OFG Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

92.7% of OFG Bancorp shares are owned by institutional investors. Comparatively, 49.7% of Parke Bancorp shares are owned by institutional investors. 3.1% of OFG Bancorp shares are owned by insiders. Comparatively, 15.3% of Parke Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

OFG Bancorp beats Parke Bancorp on 12 of the 17 factors compared between the two stocks.

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.

About Parke Bancorp

Parke Bancorp, Inc. operates as the bank holding company for Parke Bank that provides personal and business financial services to individuals and small to mid-sized businesses. The company offers various deposit products, including checking, savings, time, money market, and individual retirement accounts, as well as certificates of deposit. Its loan portfolio comprises commercial and industrial, construction, commercial and residential real estate mortgage, and consumer loans. In addition, the company provides debit cards, internet banking, and online bill payment services. Parke Bancorp, Inc. was founded in 1999 and is headquartered in Washington Township, New Jersey.