Head to Head Comparison: OFG Bancorp (NYSE:OFG) vs. Independent Bank (NASDAQ:INDB)

Independent Bank (NASDAQ:INDB) and OFG Bancorp (NYSE:OFG) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Independent Bank and OFG Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	0	3	1	1	2.60
OFG Bancorp	0	2	5	0	2.71

Independent Bank currently has a consensus target price of $76.75, indicating a potential upside of 5.40%. OFG Bancorp has a consensus target price of $47.17, indicating a potential upside of 17.77%. Given OFG Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe OFG Bancorp is more favorable than Independent Bank.

Volatility and Risk

Independent Bank has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, OFG Bancorp has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.

Valuation and Earnings

This table compares Independent Bank 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
Independent Bank	$773.81 million	4.67	$192.08 million	$4.11	17.72
OFG Bancorp	$674.87 million	2.61	$198.17 million	$4.40	9.10

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

Dividends

Independent Bank pays an annual dividend of $2.36 per share and has a dividend yield of 3.2%. OFG Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 3.0%. Independent Bank pays out 57.4% of its earnings in the form of a dividend. OFG Bancorp pays out 27.3% 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. Independent Bank has raised its dividend for 15 consecutive years and OFG Bancorp has raised its dividend for 5 consecutive years. Independent Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Independent Bank	16.64%	7.19%	1.08%
OFG Bancorp	22.26%	15.18%	1.67%

Institutional and Insider Ownership

83.4% of Independent Bank shares are owned by institutional investors. Comparatively, 92.7% of OFG Bancorp shares are owned by institutional investors. 0.8% of Independent Bank 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 hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

OFG Bancorp beats Independent Bank on 11 of the 18 factors compared between the two stocks.

About Independent Bank

Independent Bank Corp. operates as the bank holding company for Rockland Trust Company that provides commercial banking products and services to individuals and small-to-medium sized businesses in the United States. The company provides interest checking, money market, and savings accounts, as well as demand deposits and time certificates of deposit. It offers commercial real estate and construction, commercial and industrial, small business, secured and unsecured commercial, and consumer real estate loans; term loans and revolving/nonrevolving lines of credit; overdraft protection and letters of credit; and residential mortgages and home equity loans and lines. In addition, the company provides cash management services, such as ACH transaction processing, positive pay, and remote deposit services; investment management and trust services to individuals, institutions, small businesses, and charitable institutions; mobile, online, and telephone banking; estate settlement, financial planning, tax services, and other services; automated teller machines; debit and credit cards; and mutual fund and unit investment trust shares, third party model portfolios, general securities, fixed and variable annuities, and life insurance products, as well as advisory platforms. Further, it invests in low-income housing tax credit projects; holds, maintains, and disposes foreclosed properties; and operates as an investment advisor. Independent Bank Corp. was founded in 1907 and is headquartered in Rockland, Massachusetts.

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.