Contrasting Southern First Bancshares (NASDAQ:SFST) & OFG Bancorp (OFG)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Southern First Bancshares 18.49% 9.43% 0.84%
OFG Bancorp 12.41% 9.61% 1.17%

Dividends

OFG Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 2.1%. Southern First Bancshares does not pay a dividend. OFG Bancorp pays out 18.0% of its earnings in the form of a dividend. OFG Bancorp has raised its dividend for 4 consecutive years.

Institutional & Insider Ownership

70.0% of Southern First Bancshares shares are owned by institutional investors. Comparatively, 97.1% of OFG Bancorp shares are owned by institutional investors. 12.9% of Southern First Bancshares shares are owned by insiders. Comparatively, 2.4% of OFG Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Southern First Bancshares has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500. Comparatively, OFG Bancorp has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Southern First Bancshares and OFG Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southern First Bancshares 0 0 2 0 3.00
OFG Bancorp 0 1 2 0 2.67

Southern First Bancshares presently has a consensus price target of $40.00, indicating a potential downside of 10.91%. OFG Bancorp has a consensus price target of $12.67, indicating a potential upside of 10.63%. Given OFG Bancorp’s higher probable upside, analysts clearly believe OFG Bancorp is more favorable than Southern First Bancshares.

Valuation & Earnings

This table compares Southern First Bancshares and OFG Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Southern First Bancshares $70.54 million 4.68 $13.04 million $1.94 23.14
OFG Bancorp $424.33 million 1.19 $52.64 million $1.33 8.61

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

Summary

OFG Bancorp beats Southern First Bancshares on 9 of the 16 factors compared between the two stocks.

About Southern First Bancshares

Southern First Bancshares, Inc. operates as the bank holding company for Southern First Bank that provides various banking products and services to general public in South Carolina, North Carolina, and Georgia. It accepts various deposit products that include checking accounts, commercial checking accounts, savings accounts, and other time deposits, including daily money market accounts and certificates of deposit. The company's loan portfolio comprises commercial real estate loans; construction real estate loans; commercial business loans for various lines of businesses, such as the manufacturing, service industry, and professional service areas; consumer real estate and home equity loans; and other consumer loans, including secured and unsecured installment loans and revolving lines of credit. In addition, it provides other bank services, such as Internet banking, cash management, safe deposit boxes, direct deposit, automatic drafts, bill payment, and mobile banking services. The company operates through nine retail offices located in Greenville, Columbia, and Charleston; one located in Raleigh; and one located in Atlanta. Southern First Bancshares, Inc. was founded in 1999 and is headquartered in Greenville, South Carolina.

About OFG Bancorp

OFG Bancorp, a financial holding company, provides various banking and financial services. It operates in three segments: Banking, Wealth Management, and Treasury. The company offers checking and savings accounts, as well as time deposit products; commercial, consumer, auto, and mortgage lending products; and financial planning, investment brokerage, corporate and individual trust, and retirement services. It also offers securities brokerage services, including various investment alternatives, such as tax-advantaged fixed income securities, mutual funds, stocks, and bonds to retail and institutional clients; separately-managed accounts and mutual fund asset allocation programs; and pension administration and other financial services. In addition, the company is involved in the management and participation in public offerings and private placements of debt and equity securities; insurance agency business; and administration of retirement plans. Further, it is involved in various treasury-related functions with an investment portfolio consisting of mortgage-backed securities, obligations of U.S. government sponsored agencies, Puerto Rico government and agency obligations, and money market instruments. The company operates through a network of 48 branches in Puerto Rico. OFG Bancorp was founded in 1964 and is based in San Juan, Puerto Rico.

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