Financial Analysis: Ottawa Bancorp (OTCMKTS:OTTW) & Territorial Bancorp (NASDAQ:TBNK)

Territorial Bancorp (NASDAQ:TBNKGet Rating) and Ottawa Bancorp (OTCMKTS:OTTWGet Rating) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Valuation and Earnings

This table compares Territorial Bancorp and Ottawa Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Territorial Bancorp $66.77 million 2.74 $17.43 million $1.90 10.57
Ottawa Bancorp $15.36 million 2.38 $2.90 million $1.18 11.51

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

Insider and Institutional Ownership

43.4% of Territorial Bancorp shares are held by institutional investors. Comparatively, 4.3% of Ottawa Bancorp shares are held by institutional investors. 9.1% of Territorial Bancorp shares are held by insiders. Comparatively, 7.8% of Ottawa Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for Territorial Bancorp and Ottawa Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Territorial Bancorp 1 0 0 0 1.00
Ottawa Bancorp 0 0 0 0 N/A

Dividends

Territorial Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 4.6%. Ottawa Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 3.2%. Territorial Bancorp pays out 48.4% of its earnings in the form of a dividend. Ottawa Bancorp pays out 37.3% 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.

Profitability

This table compares Territorial Bancorp and Ottawa Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Territorial Bancorp 26.14% 6.73% 0.81%
Ottawa Bancorp 21.19% N/A N/A

Risk and Volatility

Territorial Bancorp has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, Ottawa Bancorp has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.

Summary

Territorial Bancorp beats Ottawa Bancorp on 11 of the 13 factors compared between the two stocks.

About Territorial Bancorp

(Get Rating)

Territorial Bancorp Inc. operates as the holding company for Territorial Savings Bank that provides various financial services to individuals, families, and businesses in the State of Hawaii. The company offers a range of deposit accounts, including passbook and statement savings accounts, certificates of deposit, money market accounts, commercial and regular checking accounts, and Super NOW accounts. It also provides various loan products comprising one-to four-family residential mortgage; home equity; consumer; multi-family mortgage; commercial business; and construction, commercial, and other nonresidential real estate loans, as well as lines of credit and investment securities. In addition, the company engages in insurance agency activities. Further, it provides various non-deposit investments, including annuities and mutual funds through a third-party broker-dealer. The company operates through a network of 29 full-service branches located in the state of Hawaii. Territorial Bancorp Inc. was founded in 1921 and is based in Honolulu, Hawaii.

About Ottawa Bancorp

(Get Rating)

Ottawa Bancorp, Inc. operates as the holding company for Ottawa Savings Bank, a savings bank that provides various financial services to individual and corporate customers in Illinois. The company's deposit products include saving, checking, money market, and interest-bearing accounts, as well as certificate of deposit. Its loan portfolio comprises commercial, non-residential real estate, one-to-four family residential, multi-family residential, consumer direct, and purchased auto loans; motor vehicle, home improvement, share, and personal unsecured loans, as well as home equity and small personal credit lines; and student loans. The company also provides cash management solutions, such as remote deposit capture, automated clearing house/payroll direct deposit, and merchant services, as well as commercial leasing services. In addition, it offers notary, lamination, night depository, document faxing, money gift envelopes, gift and travel cards, and coin counting, as well as debit and credit cards, and digital banking services. The company was formerly known as Ottawa Savings Bancorp, Inc. and changed its name to Ottawa Bancorp, Inc. in October 2016. Ottawa Bancorp, Inc. was founded in 1871 and is based in Ottawa, Illinois.

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