Bank of America (NYSE:BAC) & OceanFirst Financial (NASDAQ:OCFC) Critical Comparison

Bank of America (NYSE:BACGet Free Report) and OceanFirst Financial (NASDAQ:OCFCGet Free Report) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Earnings and Valuation

This table compares Bank of America and OceanFirst Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of America $171.91 billion 1.70 $26.52 billion $2.89 12.79
OceanFirst Financial $641.60 million 1.41 $104.03 million $1.71 8.88

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

Profitability

This table compares Bank of America and OceanFirst Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of America 13.94% 10.88% 0.89%
OceanFirst Financial 15.54% 6.19% 0.75%

Dividends

Bank of America pays an annual dividend of $0.96 per share and has a dividend yield of 2.6%. OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 5.3%. Bank of America pays out 33.2% of its earnings in the form of a dividend. OceanFirst Financial pays out 46.8% 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 of America has increased its dividend for 3 consecutive years.

Insider & Institutional Ownership

70.7% of Bank of America shares are owned by institutional investors. Comparatively, 71.0% of OceanFirst Financial shares are owned by institutional investors. 0.3% of Bank of America shares are owned by insiders. Comparatively, 4.6% of OceanFirst Financial 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.

Volatility & Risk

Bank of America has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500. Comparatively, OceanFirst Financial has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Bank of America and OceanFirst Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of America 1 7 9 0 2.47
OceanFirst Financial 0 3 1 0 2.25

Bank of America currently has a consensus target price of $38.53, suggesting a potential upside of 4.21%. OceanFirst Financial has a consensus target price of $18.50, suggesting a potential upside of 21.87%. Given OceanFirst Financial’s higher possible upside, analysts clearly believe OceanFirst Financial is more favorable than Bank of America.

Summary

Bank of America beats OceanFirst Financial on 12 of the 17 factors compared between the two stocks.

About Bank of America

(Get Free Report)

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates in four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets. The Consumer Banking segment offers traditional and money market savings accounts, certificates of deposit and IRAs, non-interest and interest-bearing checking accounts, and investment accounts and products; credit and debit cards; residential mortgages, and home equity loans; and direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. The GWIM segment provides investment management, brokerage, banking, and trust and retirement products and services; wealth management solutions; and customized solutions, including specialty asset management services. The Global Banking segment offers lending products and services, including commercial loans, leases, commitment facilities, trade finance, and commercial real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, short-term investing options, and merchant services; working capital management solutions; debt and equity underwriting and distribution, and merger-related and other advisory services; and fixed-income and equity research, and certain market-based services. The Global Markets segment provides market-making, financing, securities clearing, settlement, and custody services; securities and derivative products; and risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1784 and is based in Charlotte, North Carolina.

About OceanFirst Financial

(Get Free Report)

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.

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