Financial Comparison: ServisFirst Bancshares (NYSE:SFBS) versus OceanFirst Financial (NASDAQ:OCFC)

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

Dividends

OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.7%. ServisFirst Bancshares pays an annual dividend of $1.34 per share and has a dividend yield of 1.6%. OceanFirst Financial pays out 56.7% of its earnings in the form of a dividend. ServisFirst Bancshares pays out 29.3% 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. ServisFirst Bancshares has increased its dividend for 10 consecutive years.

Profitability

This table compares OceanFirst Financial and ServisFirst Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OceanFirst Financial	12.89%	5.22%	0.66%
ServisFirst Bancshares	24.62%	15.47%	1.46%

Risk & Volatility

OceanFirst Financial has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, ServisFirst Bancshares has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for OceanFirst Financial and ServisFirst Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OceanFirst Financial	0	4	1	1	2.50
ServisFirst Bancshares	0	2	0	0	2.00

OceanFirst Financial currently has a consensus price target of $20.6667, indicating a potential upside of 20.65%. ServisFirst Bancshares has a consensus price target of $90.50, indicating a potential upside of 11.36%. Given OceanFirst Financial’s stronger consensus rating and higher probable upside, equities research analysts plainly believe OceanFirst Financial is more favorable than ServisFirst Bancshares.

Institutional & Insider Ownership

71.0% of OceanFirst Financial shares are owned by institutional investors. Comparatively, 67.3% of ServisFirst Bancshares shares are owned by institutional investors. 5.0% of OceanFirst Financial shares are owned by company insiders. Comparatively, 6.7% of ServisFirst Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares OceanFirst Financial and ServisFirst Bancshares”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	1.42	$100.07 million	$1.41	12.15
ServisFirst Bancshares	$981.18 million	4.52	$227.24 million	$4.57	17.78

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

Summary

ServisFirst Bancshares beats OceanFirst Financial on 11 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 ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.