Contrasting Oritani Financial (ORIT) & Sandy Spring Bancorp (SASR)

Oritani Financial (NASDAQ: ORIT) and Sandy Spring Bancorp (NASDAQ:SASR) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.

Dividends

Oritani Financial pays an annual dividend of $0.70 per share and has a dividend yield of 4.2%. Sandy Spring Bancorp pays an annual dividend of $1.04 per share and has a dividend yield of 2.6%. Oritani Financial pays out 61.9% of its earnings in the form of a dividend. Sandy Spring Bancorp pays out 47.3% 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.

Risk & Volatility

Oritani Financial has a beta of 0.35, indicating that its stock price is 65% less volatile than the S&P 500. Comparatively, Sandy Spring Bancorp has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Valuation and Earnings

This table compares Oritani Financial and Sandy Spring Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Oritani Financial $159.31 million 4.81 $49.14 million $1.13 14.65
Sandy Spring Bancorp $246.04 million 3.92 $48.25 million $2.20 18.30

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

Analyst Ratings

This is a summary of current ratings for Oritani Financial and Sandy Spring Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oritani Financial 0 1 0 0 2.00
Sandy Spring Bancorp 0 3 1 0 2.25

Oritani Financial currently has a consensus price target of $17.00, suggesting a potential upside of 2.72%. Sandy Spring Bancorp has a consensus price target of $44.67, suggesting a potential upside of 10.97%. Given Sandy Spring Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Sandy Spring Bancorp is more favorable than Oritani Financial.

Profitability

This table compares Oritani Financial and Sandy Spring Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Oritani Financial 31.03% 10.73% 1.45%
Sandy Spring Bancorp 21.63% 10.91% 1.15%

Insider and Institutional Ownership

62.0% of Oritani Financial shares are owned by institutional investors. Comparatively, 70.4% of Sandy Spring Bancorp shares are owned by institutional investors. 12.1% of Oritani Financial shares are owned by insiders. Comparatively, 2.6% of Sandy Spring Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Sandy Spring Bancorp beats Oritani Financial on 10 of the 16 factors compared between the two stocks.

Oritani Financial Company Profile

Oritani Financial Corp. is a holding company for Oritani Bank (the Bank). The Bank offers a range of retail and commercial loan and deposit products. The Bank operates in the New Jersey Counties of Bergen, Hudson, Essex and Passaic. The Bank’s loan portfolio includes residential loans, residential commercial real estate loans, credit or grocery retail commercial real estate loans, other commercial real estate loans, and construction and land loans. Its investment securities are classified as held to maturity, including mortgage-backed securities, and available for sale, including equity securities and mortgage-backed securities. Its deposits include checking (non-interest and interest-bearing demand deposits), money market deposit accounts, savings accounts and time deposits. The Bank offers personal banking services, such as mobile banking, and online banking and others services, and business banking services, such as business accounts and business services.

Sandy Spring Bancorp Company Profile

Sandy Spring Bancorp, Inc. is the bank holding company for Sandy Spring Bank (the Bank). The Company operates through three segments: Community Banking, Insurance and Investment Management. The Company’s Community Banking segment operates through Sandy Spring Bank and involves delivering a range of financial products and services, including various loan and deposit products to both individuals and businesses. The Insurance segment operates through Sandy Spring Insurance Corporation, a subsidiary of the Bank, and offers annuities as an alternative to traditional deposit accounts. The Investment Management segment operates through West Financial Services, Inc., a subsidiary of the Bank, which provides investment management and financial planning services. As of December 31, 2016, the Bank conducted commercial banking business through 44 community offices and six financial centers located in Central Maryland, Northern Virginia and Washington D.C.

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