Bank Ozk (NASDAQ:OZK) and Bankwell Financial Group (NASDAQ:BWFG) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, risk, dividends, valuation and earnings.

Volatility and Risk

Bank Ozk has a beta of 2.06, indicating that its stock price is 106% more volatile than the S&P 500. Comparatively, Bankwell Financial Group has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.

Valuation and Earnings

This table compares Bank Ozk and Bankwell Financial Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank Ozk $1.27 billion 2.00 $425.91 million $3.30 5.96
Bankwell Financial Group $88.19 million 1.21 $18.22 million $2.31 5.88

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

Institutional and Insider Ownership

85.0% of Bank Ozk shares are owned by institutional investors. Comparatively, 53.1% of Bankwell Financial Group shares are owned by institutional investors. 6.7% of Bank Ozk shares are owned by insiders. Comparatively, 16.3% of Bankwell Financial Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Bank Ozk and Bankwell Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank Ozk 26.16% 8.02% 1.38%
Bankwell Financial Group 16.75% 8.13% 0.78%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Bank Ozk and Bankwell Financial Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank Ozk 0 5 2 0 2.29
Bankwell Financial Group 0 0 1 0 3.00

Bank Ozk currently has a consensus target price of $25.29, indicating a potential upside of 28.55%. Bankwell Financial Group has a consensus target price of $34.00, indicating a potential upside of 150.18%. Given Bankwell Financial Group’s stronger consensus rating and higher probable upside, analysts plainly believe Bankwell Financial Group is more favorable than Bank Ozk.

Dividends

Bank Ozk pays an annual dividend of $1.08 per share and has a dividend yield of 5.5%. Bankwell Financial Group pays an annual dividend of $0.56 per share and has a dividend yield of 4.1%. Bank Ozk pays out 32.7% of its earnings in the form of a dividend. Bankwell Financial Group pays out 24.2% 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. Bank Ozk has increased its dividend for 2 consecutive years and Bankwell Financial Group has increased its dividend for 4 consecutive years.

Summary

Bank Ozk beats Bankwell Financial Group on 11 of the 17 factors compared between the two stocks.

Bank Ozk Company Profile

Bank OZK provides retail and commercial banking services to businesses, individuals, and non-profit and governmental entities. The company accepts non-interest bearing checking, interest bearing transaction, business sweep, savings, money market, individual retirement, and other accounts, as well as time deposits. Its loan products include loans secured by residential 1-4 family, non-farm/non-residential, agricultural, construction/land development, multifamily residential properties, and other land loans; small business and consumer loans; indirect consumer marine and RV loans; small business administration, farm service agency, and USDA guaranteed loans; commercial and industrial loans; and loans to businesses or individuals engages in the production of timber, poultry, livestock, or crops. The company also ACH, wire transfer, zero balance accounts, transaction reporting, wholesale lockbox, remote deposit capture, automated credit line transfer, investment sweep accounts, reconciliation, positive pay, and merchant and commercial card services. In addition, it provides personal trusts, custodial accounts, investment management accounts, and retirement accounts; and trustee, paying agent and registered transfer agent services, and other incidental services. Further, the company is involved in the provision of real estate appraisals; ATMs; telephone banking; electronic bill pay and mobile deposits; debit cards; safe deposit boxes; investment securities services; and other products and services, as well as processes merchant debit and credit card transactions, as well as real estate development and corporate aircraft businesses. As of December 31, 2018, it operated 251 offices in Arkansas, Georgia, Florida, North Carolina, Texas, Alabama, South Carolina, California, New York, and Mississippi. The company was formerly known as Bank of the Ozarks and changed its name to Bank OZK in July 2018. Bank OZK was founded in 1903 and is headquartered in Little Rock, Arkansas.

Bankwell Financial Group Company Profile

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides a range of banking services to commercial and consumer customers in Connecticut. It accepts checking, savings, and money market accounts; and time, demand, and NOW deposits, as well as certificates of deposit. The company also provides commercial lending products, including residential real estate loans, owner-occupied commercial real estate loans, commercial real estate investment loans, business term loans, equipment financing, and lines of credit to small and mid-sized businesses, as well as real estate construction and development loans; and consumer loans, such as loans secured by savings or certificate accounts, or automobiles, as well as unsecured personal loans and overdraft lines of credit. As of June 9, 2018, it operated through a network of 12 branches. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.

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