Reviewing American Bank (OTCMKTS:AMBK) & OFG Bancorp (NYSE:OFG)

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

Dividends

OFG Bancorp pays an annual dividend of $1.40 per share and has a dividend yield of 3.4%. American Bank pays an annual dividend of $0.56 per share and has a dividend yield of 3.3%. OFG Bancorp pays out 30.6% of its earnings in the form of a dividend. American Bank pays out 26.7% 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 raised 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.

Volatility and Risk

OFG Bancorp has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, American Bank has a beta of 0.01, meaning that its share price is 99% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OFG Bancorp	$731.44 million	2.45	$205.10 million	$4.58	8.90
American Bank	$59.94 million	1.88	$13.54 million	$2.10	8.15

OFG Bancorp has higher revenue and earnings than American Bank. American 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.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OFG Bancorp	0	4	3	0	2.43
American Bank	0	0	0	0	0.00

OFG Bancorp currently has a consensus price target of $45.83, suggesting a potential upside of 12.45%. Given OFG Bancorp’s stronger consensus rating and higher probable upside, equities analysts clearly believe OFG Bancorp is more favorable than American Bank.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OFG Bancorp	22.72%	15.21%	1.69%
American Bank	22.58%	N/A	N/A

Insider and Institutional Ownership

92.7% of OFG Bancorp shares are owned by institutional investors. 3.1% of OFG Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

OFG Bancorp beats American Bank on 16 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 American Bank

American Bank Incorporated operates as the bank holding company for American Bank that provides various banking products and services to consumer, business, institutional, and governmental customers. It accepts a range of interest-bearing checking and money market accounts, savings accounts, certificates of deposit, and individual retirement accounts. The company also offers commercial, industrial, and other loans; commercial mortgage loans; commercial construction loans; residential mortgage loans; and consumer loans, including personal term loans, personal credit lines, automobile loans, home equity loans, and home equity lines of credit and loans. In addition, it provides online or mobile banking, automated teller machine, safe deposit box rental, and wire transfer services, as well as sells checks and checkbooks, and purchases investment securities. The company operates an office located in Allentown, Pennsylvania; and a loan production office in Blue Bell, Pennsylvania. The company was founded in 1997 and is based in Allentown, Pennsylvania.