Head to Head Analysis: OceanFirst Financial (NASDAQ:OCFC) versus Citigroup (NYSE:C)

Citigroup (NYSE:C) and OceanFirst Financial (NASDAQ:OCFC) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Analyst Recommendations

This is a summary of current ratings and target prices for Citigroup and OceanFirst Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citigroup	1	5	10	0	2.56
OceanFirst Financial	0	4	1	0	2.20

Citigroup currently has a consensus target price of $65.03, suggesting a potential upside of 2.48%. OceanFirst Financial has a consensus target price of $18.00, suggesting a potential upside of 13.28%. Given OceanFirst Financial’s higher possible upside, analysts clearly believe OceanFirst Financial is more favorable than Citigroup.

Insider and Institutional Ownership

71.7% of Citigroup shares are owned by institutional investors. Comparatively, 71.0% of OceanFirst Financial shares are owned by institutional investors. 0.1% of Citigroup shares are owned by company insiders. Comparatively, 5.0% of OceanFirst Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Citigroup has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500. Comparatively, OceanFirst Financial has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500.

Valuation & Earnings

This table compares Citigroup and OceanFirst Financial’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citigroup	$156.82 billion	0.77	$9.23 billion	$3.38	18.78
OceanFirst Financial	$641.60 million	1.45	$104.03 million	$1.71	9.29

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

Dividends

Citigroup pays an annual dividend of $2.12 per share and has a dividend yield of 3.3%. OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 5.0%. Citigroup pays out 62.7% of its earnings in the form of a dividend. OceanFirst Financial pays out 46.8% 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. OceanFirst Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Citigroup and OceanFirst Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citigroup	4.90%	6.17%	0.49%
OceanFirst Financial	15.54%	6.17%	0.75%

Summary

Citigroup beats OceanFirst Financial on 8 of the 15 factors compared between the two stocks.

About Citigroup

Citigroup Inc., a diversified financial service holding company, provides various financial product and services to consumers, corporations, governments, and institutions worldwide. It operates through five segments: Services, Markets, Banking, U.S. Personal Banking, and Wealth. The Services segment includes Treasury and Trade Solutions, which provides cash management, trade, and working capital solutions to multinational corporations, financial institutions, and public sector organizations; and Securities Services, such as cross-border support for clients, local market expertise, post-trade technologies, data solutions, and various securities services solutions. The Markets segment offers sales and trading services for equities, foreign exchange, rates, spread products, and commodities to corporate, institutional, and public sector clients; and market-making services, including asset classes, risk management solutions, financing, prime brokerage, research, securities clearing, and settlement. The banking segment includes investment banking; advisory services related to mergers and acquisitions, divestitures, restructurings, and corporate defense activities; and corporate lending, which includes corporate and commercial banking. The U.S. Personal Banking segment provides co-branded cards and retail banking services. The Wealth segment provides financial services to high-net-worth clients through banking, lending, mortgages, investment, custody, and trust product offerings; and to professional industries, including law firms, consulting groups, accounting, and asset management. The company was founded in 1812 and is headquartered in New York, New York.

About OceanFirst Financial

OceanFirst Financial Corp. operates as the bank holding company for OceanFirst Bank N.A. that provides community banking services to retail and commercial customers. It accepts money market accounts, savings accounts, interest-bearing checking accounts, non-interest-bearing accounts, and time deposits, that includes brokered deposits to retail, government, and business customers. The company also offers commercial real estate, multi-family, land loans, construction, and commercial and industrial loans; fixed-rate and adjustable-rate mortgage loans that are secured by one-to-four family residences; and consumer loans, such as home equity loans and lines of credit, student loans, overdraft line of credit, loans on savings accounts, and other consumer loans. In addition, it invests in mortgage-backed securities, securities issued by the U.S. Government and agencies, corporate securities, and other investments. Further, the company offers bankcard, trust and asset management services; and bank owned life insurance products. The company was founded in 1902 and is based in Red Bank, New Jersey.