Analyzing OFG Bancorp (NYSE:OFG) and Freedom Financial (OTCMKTS:FDVA)

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

Insider & Institutional Ownership

92.7% of OFG Bancorp shares are held by institutional investors. 3.1% of OFG Bancorp shares are held by insiders. Comparatively, 13.3% of Freedom Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OFG Bancorp	22.06%	14.97%	1.66%
Freedom Financial	6.54%	5.21%	0.40%

Risk & Volatility

OFG Bancorp has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Freedom Financial has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for OFG Bancorp and Freedom Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OFG Bancorp	0	1	3	0	2.75
Freedom Financial	0	0	0	0	0.00

OFG Bancorp presently has a consensus price target of $47.50, indicating a potential upside of 11.01%. Given OFG Bancorp’s stronger consensus rating and higher possible upside, equities analysts plainly believe OFG Bancorp is more favorable than Freedom Financial.

Earnings and Valuation

This table compares OFG Bancorp and Freedom Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OFG Bancorp	$873.53 million	2.18	$198.17 million	$4.24	10.09
Freedom Financial	$66.41 million	1.24	$4.71 million	$0.60	19.20

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

Summary

OFG Bancorp beats Freedom Financial on 12 of the 14 factors compared between the two stocks.

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.

About Freedom Financial

Freedom Financial Holdings, Inc. operates as the bank holding company for The Freedom Bank of Virginia that provides commercial banking, personal banking, and mortgage banking solutions. The company offers personal and business checking accounts, interest bearing business savings accounts, money market accounts, personal savings accounts, certificates of deposits, and IRAs, as well as insured cash sweep and certificate of deposit account registry services. It also provides business term, personal, and mortgage loans; commercial lines of credit; commercial real estate mortgage and small business lending services; home equity lines; and credit cards. In addition, the company offers treasury management, online and mobile banking, remote deposit capture, ACH, and wire transfer services; business valuation, bank-at-work, and merchant services; and prestige banking services. The company was founded in 2001 and is headquartered in Fairfax, Virginia.