Contrasting Oritani Financial (ORIT) & TCF Financial (TCF)

TCF Financial (NYSE: TCF) and Oritani Financial (NASDAQ:ORIT) are both financials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitability, analyst recommendations and earnings.

Valuation & Earnings

This table compares TCF Financial and Oritani Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TCF Financial $1.40 billion 2.71 $212.12 million $1.13 19.51
Oritani Financial $159.31 million 4.85 $49.14 million $1.13 14.78

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

Insider & Institutional Ownership

82.3% of TCF Financial shares are held by institutional investors. Comparatively, 62.0% of Oritani Financial shares are held by institutional investors. 2.5% of TCF Financial shares are held by insiders. Comparatively, 12.1% of Oritani Financial shares are held by 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 recent ratings and target prices for TCF Financial and Oritani Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TCF Financial 1 7 5 0 2.31
Oritani Financial 0 1 0 0 2.00

TCF Financial presently has a consensus price target of $19.58, suggesting a potential downside of 11.19%. Oritani Financial has a consensus price target of $17.00, suggesting a potential upside of 1.80%. Given Oritani Financial’s higher possible upside, analysts plainly believe Oritani Financial is more favorable than TCF Financial.

Risk and Volatility

TCF Financial has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, Oritani Financial has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
TCF Financial 15.27% 9.63% 0.98%
Oritani Financial 31.03% 10.73% 1.45%

Dividends

TCF Financial pays an annual dividend of $0.30 per share and has a dividend yield of 1.4%. Oritani Financial pays an annual dividend of $0.70 per share and has a dividend yield of 4.2%. TCF Financial pays out 26.5% of its earnings in the form of a dividend. Oritani Financial pays out 61.9% 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.

Summary

TCF Financial beats Oritani Financial on 8 of the 15 factors compared between the two stocks.

TCF Financial Company Profile

TCF Financial Corporation (TCF) is a bank holding company. The Company’s principal subsidiary is TCF National Bank (TCF Bank). The Company operates in three segments: Consumer Banking, Wholesale Banking and Enterprise Services. Consumer Banking comprises all of the Company’s consumer-facing businesses. The Consumer Banking segment includes retail banking, consumer real estate and auto finance. Wholesale Banking comprises commercial real estate and business lending, leasing and equipment finance and inventory finance. TCF’s consumer banking strategy is primarily to generate deposits to use for funding high credit quality secured loans and leases. Enterprise Services comprises corporate treasury, corporate functions and the Holding Company. As of December 31, 2016, the Company’s total securities available for sale were $1.4 billion. As of December 31, 2016, the Company’s total loans were $17.8 billion. As of December 31, 2016, the Company’s total deposits were $17.2 billion.

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.

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