Head-To-Head Survey: Touchstone Bankshares (OTCMKTS:TSBA) and OFG Bancorp (NYSE:OFG)

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

Risk and Volatility

Touchstone Bankshares has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, OFG Bancorp has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Touchstone Bankshares and OFG Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Touchstone Bankshares	0	0	0	0	0.00
OFG Bancorp	0	1	3	0	2.75

OFG Bancorp has a consensus price target of $45.50, suggesting a potential upside of 8.83%. Given OFG Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe OFG Bancorp is more favorable than Touchstone Bankshares.

Dividends

Touchstone Bankshares pays an annual dividend of $0.32 per share and has a dividend yield of 2.2%. OFG Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. Touchstone Bankshares pays out 49.2% of its earnings in the form of a dividend. OFG Bancorp pays out 28.8% 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 and Insider Ownership

0.4% of Touchstone Bankshares shares are owned by institutional investors. Comparatively, 92.7% of OFG Bancorp shares are owned by institutional investors. 10.4% of Touchstone Bankshares shares are owned by company insiders. Comparatively, 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.

Valuation and Earnings

This table compares Touchstone Bankshares 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
Touchstone Bankshares	N/A	N/A	$1.61 million	$0.65	21.92
OFG Bancorp	$665.65 million	2.82	$198.17 million	$4.17	10.03

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Touchstone Bankshares	N/A	N/A	N/A
OFG Bancorp	22.71%	15.80%	1.75%

Summary

OFG Bancorp beats Touchstone Bankshares on 14 of the 16 factors compared between the two stocks.

About Touchstone Bankshares

Touchstone Bankshares, Inc. operates as the bank holding company for Touchstone Bank that provides various community banking products and services in the United States. The company offers personal and business savings and checking accounts. It also provides home mortgage, professional mortgage, home equity, auto, and personal term loans; personal lines of credit; and business loans comprising commercial real estate, operating capital, business term, and construction loans, as well as business lines of credit. In addition, the company offers credit and debit cards; and digital banking, treasury, wealth management, and financial planning services. It has branches in northern North Carolina and south-central Virginia. The company was founded in 1906 and is headquartered in Prince George, Virginia.

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.