BofI (NASDAQ:BOFI) and Sandy Spring Bancorp (SASR) Critical Analysis

Sandy Spring Bancorp (NASDAQ: SASR) and BofI (NASDAQ:BOFI) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Earnings and Valuation

This table compares Sandy Spring Bancorp and BofI’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sandy Spring Bancorp $246.04 million 3.69 $53.21 million $2.20 17.19
BofI $455.42 million 5.03 $134.74 million $2.09 17.21

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

Profitability

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

Net Margins Return on Equity Return on Assets
Sandy Spring Bancorp 21.63% 10.91% 1.15%
BofI 29.36% 17.00% 1.62%

Risk and Volatility

Sandy Spring Bancorp has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, BofI has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500.

Insider & Institutional Ownership

70.5% of Sandy Spring Bancorp shares are held by institutional investors. Comparatively, 84.7% of BofI shares are held by institutional investors. 2.6% of Sandy Spring Bancorp shares are held by insiders. Comparatively, 6.2% of BofI shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Sandy Spring Bancorp pays an annual dividend of $1.04 per share and has a dividend yield of 2.7%. BofI does not pay a dividend. Sandy Spring Bancorp pays out 47.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations for Sandy Spring Bancorp and BofI, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sandy Spring Bancorp 0 3 1 0 2.25
BofI 0 1 3 0 2.75

Sandy Spring Bancorp presently has a consensus price target of $44.67, suggesting a potential upside of 18.10%. BofI has a consensus price target of $34.50, suggesting a potential downside of 4.09%. Given Sandy Spring Bancorp’s higher possible upside, analysts clearly believe Sandy Spring Bancorp is more favorable than BofI.

Summary

BofI beats Sandy Spring Bancorp on 12 of the 16 factors compared between the two stocks.

About Sandy Spring Bancorp

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.

About BofI

BofI Holding, Inc. (BofI) is the holding company for BofI Federal Bank (the Bank). The Bank is a diversified financial services company. The Bank provides consumer and business banking products through its branchless, low-cost distribution channels and affinity partners. The Bank has deposit and loan customers, including consumer and business checking, savings and time deposit accounts and financing for single family and multifamily residential properties, small-to-medium size businesses in target sectors, and selected specialty finance receivables. The Bank distributes its deposit products through a range of retail distribution channels, and its deposits consist of demand, savings and time deposits accounts. Its mortgage-backed securities consist primarily of mortgage pass-through securities issued by government-sponsored entities and non-agency collateralized mortgage obligations and pass-through mortgage-backed securities issued by private sponsors.

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