Reviewing OFG Bancorp (NYSE:OFG) and First Interstate BancSystem (NASDAQ:FIBK)

OFG Bancorp (NYSE:OFG) and First Interstate BancSystem (NASDAQ:FIBK) are both mid-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, valuation, institutional ownership, risk, earnings, dividends and profitability.

Risk & Volatility

OFG Bancorp has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, First Interstate BancSystem has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.

Dividends

OFG Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 6.1%. OFG Bancorp pays out 25.6% of its earnings in the form of a dividend. First Interstate BancSystem pays out 74.9% 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. First Interstate BancSystem has increased its dividend for 11 consecutive years. First Interstate BancSystem is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares OFG Bancorp and First Interstate BancSystem’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OFG Bancorp	22.95%	16.25%	1.75%
First Interstate BancSystem	17.22%	8.19%	0.86%

Valuation & Earnings

This table compares OFG Bancorp and First Interstate BancSystem”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OFG Bancorp	$658.56 million	3.15	$181.87 million	$3.91	11.28
First Interstate BancSystem	$994.50 million	3.21	$257.50 million	$2.51	12.18

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

Insider and Institutional Ownership

92.7% of OFG Bancorp shares are owned by institutional investors. Comparatively, 88.7% of First Interstate BancSystem shares are owned by institutional investors. 3.1% of OFG Bancorp shares are owned by company insiders. Comparatively, 6.9% of First Interstate BancSystem shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for OFG Bancorp and First Interstate BancSystem, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OFG Bancorp	0	0	3	0	3.00
First Interstate BancSystem	0	4	2	0	2.33

OFG Bancorp presently has a consensus price target of $49.33, indicating a potential upside of 12.12%. First Interstate BancSystem has a consensus price target of $33.33, indicating a potential upside of 9.04%. Given OFG Bancorp’s stronger consensus rating and higher possible upside, equities research analysts plainly believe OFG Bancorp is more favorable than First Interstate BancSystem.

Summary

OFG Bancorp beats First Interstate BancSystem on 10 of the 17 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 First Interstate BancSystem

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides range of banking products and services in the United States. It offers various traditional depository products, including checking, savings, and time deposits; and repurchase agreements primarily for commercial and municipal depositors. The company also offers real estate loans comprising commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans comprising direct personal loans, credit card loans and lines of credit, and indirect loans; variable and fixed rate commercial loans for small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions; and agricultural loans. In addition, it provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. Further, the company offers marketing, credit review, loan servicing, credit cards issuance and servicing, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, other operational, and specialized staff support services, as well as online and mobile banking services. The company serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, governmental services, healthcare, hospitality, housing, professional services, real estate development, retail, technology, tourism, and wholesale trade. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.