Critical Review: OceanFirst Financial (NASDAQ:OCFC) versus Heartland BancCorp (OTCMKTS:HLAN)

OceanFirst Financial (NASDAQ:OCFCGet Free Report) and Heartland BancCorp (OTCMKTS:HLANGet Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Dividends

OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 5.2%. Heartland BancCorp pays an annual dividend of $3.04 per share and has a dividend yield of 3.5%. OceanFirst Financial pays out 47.1% of its earnings in the form of a dividend. Heartland BancCorp pays out 31.6% 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.

Earnings and Valuation

This table compares OceanFirst Financial and Heartland BancCorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OceanFirst Financial $641.60 million 1.41 $104.03 million $1.70 8.98
Heartland BancCorp $104.83 million 1.68 $19.52 million $9.62 9.07

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

Volatility & Risk

OceanFirst Financial has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Heartland BancCorp has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500.

Insider and Institutional Ownership

70.4% of OceanFirst Financial shares are owned by institutional investors. Comparatively, 1.6% of Heartland BancCorp shares are owned by institutional investors. 4.6% of OceanFirst Financial shares are owned by company insiders. Comparatively, 22.7% of Heartland BancCorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for OceanFirst Financial and Heartland BancCorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OceanFirst Financial 0 3 2 0 2.40
Heartland BancCorp 0 0 0 0 N/A

OceanFirst Financial currently has a consensus target price of $20.00, indicating a potential upside of 31.06%. Given OceanFirst Financial’s higher probable upside, analysts clearly believe OceanFirst Financial is more favorable than Heartland BancCorp.

Profitability

This table compares OceanFirst Financial and Heartland BancCorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OceanFirst Financial 16.21% 6.69% 0.80%
Heartland BancCorp 18.62% N/A N/A

Summary

OceanFirst Financial beats Heartland BancCorp on 9 of the 15 factors compared between the two stocks.

About OceanFirst Financial

(Get Free Report)

OceanFirst Financial Corp. operates as the bank holding company for OceanFirst Bank N.A. that provides community banking services. It accepts money market accounts, savings accounts, interest-bearing checking accounts, non-interest-bearing demand deposits, and time deposits to retail, government, and business customers. The company also offers commercial real estate, multi-family, land loans, construction, 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 sells life insurance products. The company was founded in 1902 and is based in Red Bank, New Jersey.

About Heartland BancCorp

(Get Free Report)

Heartland BancCorp operates as the bank holding company for Heartland Bank that provides various banking and financial services to individual and corporate customers. It offers personal and business checking and savings accounts. The company also provides various lending solutions comprising home mortgage loans; personal loans, such as home equity and personal unsecured loans, as well as automobile, boat, motorcycle, power sport vehicle, recreational vehicle, and trailer loans; commercial and residential real estate loans, construction loans, small business administration loans, and working capital lines of credit and equipment financing; participation loans; financial solutions for various markets; and agribusiness lending solutions. In addition, it offers credit and debit cards, wire transfers, night depository, safe deposit boxes, cashier's checks, notary services, overdraft protection, treasury management, retirement and education planning, wealth management, mobile wallet, and online banking services, as well as insurance products and services. The company was founded in 1911 and is based in Whitehall, Ohio.

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