Head to Head Analysis: Provident Financial Services (NYSE:PFS) and Ottawa Savings Bancorp (NYSE:OTTW)

Provident Financial Services (NYSE:PFS) and Ottawa Savings Bancorp (NASDAQ:OTTW) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Profitability

This table compares Provident Financial Services and Ottawa Savings Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Provident Financial Services 29.23% 9.28% 1.29%
Ottawa Savings Bancorp 14.16% 3.82% 0.69%

Analyst Ratings

This is a breakdown of current ratings for Provident Financial Services and Ottawa Savings Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Provident Financial Services 0 1 1 0 2.50
Ottawa Savings Bancorp 0 0 0 0 N/A

Provident Financial Services presently has a consensus price target of $26.00, suggesting a potential upside of 0.85%. Given Provident Financial Services’ higher possible upside, analysts plainly believe Provident Financial Services is more favorable than Ottawa Savings Bancorp.

Insider and Institutional Ownership

64.9% of Provident Financial Services shares are held by institutional investors. Comparatively, 23.1% of Ottawa Savings Bancorp shares are held by institutional investors. 3.0% of Provident Financial Services shares are held by insiders. Comparatively, 7.0% of Ottawa Savings Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Provident Financial Services has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, Ottawa Savings Bancorp has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500.

Valuation & Earnings

This table compares Provident Financial Services and Ottawa Savings Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Provident Financial Services $418.51 million 4.10 $118.39 million $1.82 14.16
Ottawa Savings Bancorp $13.38 million 3.07 $1.99 million N/A N/A

Provident Financial Services has higher revenue and earnings than Ottawa Savings Bancorp.

Dividends

Provident Financial Services pays an annual dividend of $0.92 per share and has a dividend yield of 3.6%. Ottawa Savings Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.9%. Provident Financial Services pays out 50.5% of its earnings in the form of a dividend. Provident Financial Services has increased its dividend for 8 consecutive years. Provident Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Provident Financial Services beats Ottawa Savings Bancorp on 12 of the 15 factors compared between the two stocks.

Provident Financial Services Company Profile

Provident Financial Services, Inc. operates as the holding company for Provident Bank that provides various banking services to individuals, families, and businesses in the United States. The company's deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA, and KEOGH products. Its loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, and retail and industrial properties; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, and marine loans. The company also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, it provides trust and estate administration services; and asset management services comprising investment management, asset allocation, trust and estate administration, financial planning, tax compliance and planning, and family office services to individuals, municipalities, non-profits, corporations, and pension funds. Further, the company sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure. As of December 31, 2018, it operated 84 full-service branch offices in northern and central New Jersey, as well as in Pennsylvania. The company was founded in 1839 and is headquartered in Jersey City, New Jersey.

Ottawa Savings Bancorp Company Profile

Ottawa Bancorp, Inc. operates as the holding company for Ottawa Savings Bank, a chartered savings bank that provides various financial services to individual and corporate customers in Illinois. The company offers various deposit accounts, including checking, money market, regular savings, club savings, certificate, and various retirement accounts. It also provides one-to-four family residential, multi-family and non-residential real estate, commercial, and construction loans; and consumer loans comprising auto, share, and personal unsecured loans, as well as home equity lines of credit. The company was formerly known as Ottawa Savings Bancorp, Inc. and changed its name to Ottawa Bancorp, Inc. in October 2016. Ottawa Bancorp, Inc. was founded in 1871 and is headquartered in Ottawa, Illinois.

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