Western New England Bancorp (NASDAQ: OCFC) and OceanFirst Financial (NASDAQ:OCFC) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Dividends

Western New England Bancorp pays an annual dividend of $0.16 per share and has a dividend yield of 1.5%. OceanFirst Financial pays an annual dividend of $0.60 per share and has a dividend yield of 2.1%. Western New England Bancorp pays out 32.0% of its earnings in the form of a dividend. OceanFirst Financial pays out 35.3% 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. OceanFirst Financial has increased its dividend for 4 consecutive years. OceanFirst Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

55.5% of Western New England Bancorp shares are owned by institutional investors. Comparatively, 72.8% of OceanFirst Financial shares are owned by institutional investors. 5.4% of Western New England Bancorp shares are owned by insiders. Comparatively, 3.8% of OceanFirst Financial 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.

Analyst Recommendations

This is a breakdown of recent ratings for Western New England Bancorp and OceanFirst Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Western New England Bancorp 0 3 1 0 2.25
OceanFirst Financial 0 0 6 0 3.00

Western New England Bancorp currently has a consensus target price of $11.63, indicating a potential upside of 9.67%. OceanFirst Financial has a consensus target price of $33.17, indicating a potential upside of 13.35%. Given OceanFirst Financial’s stronger consensus rating and higher possible upside, analysts clearly believe OceanFirst Financial is more favorable than Western New England Bancorp.

Profitability

This table compares Western New England Bancorp and OceanFirst Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Western New England Bancorp 14.08% 6.48% 0.76%
OceanFirst Financial 16.84% 8.97% 1.11%

Valuation & Earnings

This table compares Western New England Bancorp and OceanFirst Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Western New England Bancorp $82.54 million 3.82 $12.32 million $0.50 21.20
OceanFirst Financial $215.90 million 6.55 $42.47 million $1.70 17.21

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

Volatility and Risk

Western New England Bancorp has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500. Comparatively, OceanFirst Financial has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Summary

OceanFirst Financial beats Western New England Bancorp on 14 of the 17 factors compared between the two stocks.

Western New England Bancorp Company Profile

Western New England Bancorp, Inc. operates as the holding company for Westfield Bank that provides community banking products and services to individuals and businesses. The company accepts various deposit accounts, including time deposits, money market accounts, savings accounts, demand accounts, and interest bearing checking accounts. It also offers commercial and industrial loans comprising business installment loans, vehicle and equipment financing, lines of credit, and other commercial loans; commercial real estate loans to finance the purchase of apartment buildings, business properties, and multi-family investment properties; construction loans to the developers of commercial and residential properties; residential real estate loans and originations; home equity loans; and consumer loans. In addition, the company provides complementary commercial products and services consisting of commercial deposit accounts, cash management services, Internet banking, sweep accounts, ATM network, and night deposit services; and invests in government-sponsored enterprise debt securities and municipal bonds. It operates a network of 21 banking offices located in Agawam, Chicopee, Feeding Hills, East Longmeadow, Holyoke, Ludlow, South Hadley, Southwick, Springfield, Ware, West Springfield, and Westfield, Massachusetts, Granby and Enfield, and Connecticut. The company was formerly known as Westfield Financial, Inc. and changed its name to Western New England Bancorp, Inc. in October 2016. Western New England Bancorp, Inc. was founded in 1853 and is headquartered in Westfield, Massachusetts.

OceanFirst Financial Company Profile

OceanFirst Financial Corp. operates as the holding company for OceanFirst Bank N.A. that provides a range of community banking services. The company offers various deposit products to retail, government, and business customers, including money market accounts, savings accounts, interest-bearing checking accounts, non-interest-bearing accounts, and time deposits. It also provides commercial real estate, multi-family mortgage, and land loans; fixed-rate and adjustable-rate mortgage loans that are secured by one-to-four family residences; consumer loans, such as home equity loans and lines of credit, overdraft line of credit, loans on savings accounts, and other consumer loans; and commercial and industrial loans, and lines of credit. In addition, the company invests in mortgage-backed securities, securities issued by the U.S. Government and agencies, corporate securities, and other investments. Further, it offers bankcard and wealth management services; and sells alternative investment products and life insurance products. The company operates through an administrative/branch office located in Toms River, New Jersey; and 45 additional branch offices and 3 deposit production facilities in central and southern New Jersey, as well as operates a wealth management office in Ocean County, and commercial loan production offices in the Philadelphia area and Atlantic, Cape May, and Mercer Counties in New Jersey. OceanFirst Financial Corp. was founded in 1902 and is based in Toms River, New Jersey.

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