Critical Comparison: Bank OZK (NASDAQ:OZK) and Hanover Bancorp (NASDAQ:HNVR)

Bank OZK (NASDAQ:OZK) and Hanover Bancorp (NASDAQ:HNVR) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Valuation and Earnings

This table compares Bank OZK and Hanover Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank OZK	$2.81 billion	2.01	$715.48 million	$6.05	8.34
Hanover Bancorp	$75.28 million	2.56	$7.49 million	$1.27	21.54

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

Institutional & Insider Ownership

86.2% of Bank OZK shares are held by institutional investors. Comparatively, 15.0% of Hanover Bancorp shares are held by institutional investors. 6.7% of Bank OZK shares are held by insiders. Comparatively, 24.4% of Hanover Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Bank OZK and Hanover Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank OZK	2	6	3	0	2.09
Hanover Bancorp	0	2	2	0	2.50

Bank OZK currently has a consensus target price of $56.88, suggesting a potential upside of 12.78%. Hanover Bancorp has a consensus target price of $28.50, suggesting a potential upside of 4.20%. Given Bank OZK’s higher possible upside, analysts clearly believe Bank OZK is more favorable than Hanover Bancorp.

Volatility and Risk

Bank OZK has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Hanover Bancorp has a beta of 0.1, suggesting that its stock price is 90% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bank OZK	24.95%	11.87%	1.67%
Hanover Bancorp	6.71%	6.00%	0.50%

Dividends

Bank OZK pays an annual dividend of $1.92 per share and has a dividend yield of 3.8%. Hanover Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.5%. Bank OZK pays out 31.7% of its earnings in the form of a dividend. Hanover Bancorp pays out 31.5% 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 raised its dividend for 29 consecutive years. Bank OZK is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Bank OZK beats Hanover Bancorp on 12 of the 17 factors compared between the two stocks.

About Bank OZK

Bank OZK provides various retail and commercial banking services for individuals and businesses in the United States. The company offers deposit services, including non-interest bearing checking, interest bearing transaction, business sweep, savings, money market, individual retirement, and other accounts, as well as time and reciprocal deposits. It also provides trust and wealth services, such as personal trusts, custodial accounts, investment management accounts, and retirement accounts, as well as corporate trust services, including trustee, paying agent and registered transfer agent services, and other related services. In addition, the company offers treasury management services comprising automated clearing house, wire transfer, transaction reporting, wholesale lockbox, remote deposit capture, automated credit line transfer, reconciliation, positive pay, commercial card, and other services, as well as zero balance and investment sweep accounts. Further, it provides real estate, consumer, small business, indirect recreational vehicle and marine, equipment, agricultural, commercial and industrial, government guaranteed, lines of credit, homebuilder, and affordable housing loans; lender and structured, business aviation, and subscription financing services; and mortgage and other lending products. Additionally, the company offers ATMs; telephone, online, and mobile banking services; credit and debit cards; safe deposit boxes; and other products and services. 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.

About Hanover Bancorp

Hanover Bancorp, Inc., a bank holding company for Hanover Community Bank, provides personal and business lending and deposit services to businesses, municipalities, and individuals in the New York metro area. The company offers checking, credit cards, debit cards, money market, savings, government and municipal banking, and professional services, as well as time deposits, including certificate of deposit and individual retirement accounts. It also provides business loans, commercial real estate financing, small business administration, lending directory services, and residential mortgage. In addition, the company offers cash management, online and mobile banking, merchant services, and digital solutions. Its banking offices are located in Nassau, Suffolk, Queens, Kings, New York Counties, New York, Monmouth County, Freehold, and New Jersey. The company was founded in 2008 and is headquartered in Mineola, New York.