Hanover Bancorp (NASDAQ:HNVR) versus OFG Bancorp (NYSE:OFG) Critical Comparison

Hanover Bancorp (NASDAQ:HNVR) and OFG Bancorp (NYSE:OFG) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Hanover Bancorp 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
Hanover Bancorp	$143.32 million	1.16	$7.49 million	$1.05	22.06
OFG Bancorp	$688.35 million	2.78	$205.10 million	$4.84	9.36

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Hanover Bancorp and OFG Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hanover Bancorp	1	3	1	0	2.00
OFG Bancorp	0	3	2	1	2.67

Hanover Bancorp currently has a consensus target price of $24.33, suggesting a potential upside of 5.07%. OFG Bancorp has a consensus target price of $47.20, suggesting a potential upside of 4.19%. Given Hanover Bancorp’s higher probable upside, research analysts clearly believe Hanover Bancorp is more favorable than OFG Bancorp.

Dividends

Hanover Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. OFG Bancorp pays an annual dividend of $1.40 per share and has a dividend yield of 3.1%. Hanover Bancorp pays out 38.1% of its earnings in the form of a dividend. OFG Bancorp pays out 28.9% 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. OFG Bancorp has raised its dividend for 5 consecutive years. OFG Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hanover Bancorp	5.53%	5.09%	0.42%
OFG Bancorp	23.45%	15.62%	1.74%

Insider and Institutional Ownership

15.0% of Hanover Bancorp shares are owned by institutional investors. Comparatively, 92.7% of OFG Bancorp shares are owned by institutional investors. 24.8% of Hanover Bancorp shares are owned by insiders. Comparatively, 1.2% of OFG Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Hanover Bancorp has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500. Comparatively, OFG Bancorp has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Summary

OFG Bancorp beats Hanover Bancorp on 15 of the 18 factors compared between the two stocks.

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.

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.