Financial Survey: OceanFirst Financial (NASDAQ:OCFC) vs. West Bancorporation (NASDAQ:WTBA)

OceanFirst Financial (NASDAQ:OCFC) and West Bancorporation (NASDAQ:WTBA) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Institutional and Insider Ownership

71.0% of OceanFirst Financial shares are held by institutional investors. Comparatively, 44.3% of West Bancorporation shares are held by institutional investors. 5.1% of OceanFirst Financial shares are held by insiders. Comparatively, 4.6% of West Bancorporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares OceanFirst Financial and West Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OceanFirst Financial	11.77%	5.00%	0.63%
West Bancorporation	16.04%	13.40%	0.80%

Risk and Volatility

OceanFirst Financial has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500. Comparatively, West Bancorporation has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for OceanFirst Financial and West Bancorporation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OceanFirst Financial	0	3	3	1	2.71
West Bancorporation	0	2	0	1	2.67

OceanFirst Financial currently has a consensus target price of $21.60, suggesting a potential upside of 20.47%. West Bancorporation has a consensus target price of $24.00, suggesting a potential upside of 9.54%. Given OceanFirst Financial’s stronger consensus rating and higher possible upside, equities analysts plainly believe OceanFirst Financial is more favorable than West Bancorporation.

Dividends

OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.5%. West Bancorporation pays an annual dividend of $1.00 per share and has a dividend yield of 4.6%. OceanFirst Financial pays out 62.0% of its earnings in the form of a dividend. West Bancorporation pays out 52.6% 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. West Bancorporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares OceanFirst Financial and West Bancorporation”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OceanFirst Financial	$391.17 million	2.63	$100.07 million	$1.29	13.90
West Bancorporation	$92.05 million	4.03	$24.05 million	$1.90	11.53

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

Summary

OceanFirst Financial beats West Bancorporation on 9 of the 16 factors compared between the two stocks.

About OceanFirst Financial

OceanFirst Financial Corp. operates as the bank holding company for OceanFirst Bank N.A. that provides community banking services to retail and commercial customers. It accepts money market accounts, savings accounts, interest-bearing checking accounts, non-interest-bearing accounts, and time deposits, that includes brokered deposits to retail, government, and business customers. The company also offers commercial real estate, multi-family, land loans, construction, and commercial and industrial loans; fixed-rate and adjustable-rate mortgage loans that are secured by one-to-four family residences; and consumer loans, such as home equity loans and lines of credit, student loans, overdraft line of credit, loans on savings accounts, and other consumer loans. In addition, it invests in mortgage-backed securities, securities issued by the U.S. Government and agencies, corporate securities, and other investments. Further, the company offers bankcard, trust and asset management services; and bank owned life insurance products. The company was founded in 1902 and is based in Red Bank, New Jersey.

About West Bancorporation

West Bancorporation, Inc. operates as the financial holding company provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers deposit services, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers online and mobile banking, treasury management services including cash management, client-generated automated clearing house transactions, remote deposit, and fraud protection services; merchant credit card processing and corporate credit cards; and administration of estates, conservatorships, personal trusts, and agency accounts. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.