Comparing Southern Missouri Bancorp (NASDAQ:SMBC) and OceanFirst Financial (NASDAQ:OCFC)

Southern Missouri Bancorp (NASDAQ:SMBC) and OceanFirst Financial (NASDAQ:OCFC) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Institutional & Insider Ownership

49.5% of Southern Missouri Bancorp shares are owned by institutional investors. Comparatively, 71.0% of OceanFirst Financial shares are owned by institutional investors. 15.8% of Southern Missouri Bancorp 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 large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and target prices for Southern Missouri Bancorp and OceanFirst Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern Missouri Bancorp	0	2	2	0	2.50
OceanFirst Financial	0	4	1	0	2.20

Southern Missouri Bancorp currently has a consensus target price of $70.67, suggesting a potential upside of 4.55%. OceanFirst Financial has a consensus target price of $21.67, suggesting a potential upside of 17.43%. Given OceanFirst Financial’s higher probable upside, analysts clearly believe OceanFirst Financial is more favorable than Southern Missouri Bancorp.

Dividends

Southern Missouri Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 1.5%. OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.3%. Southern Missouri Bancorp pays out 16.7% of its earnings in the form of a dividend. OceanFirst Financial pays out 68.4% 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. Southern Missouri Bancorp has increased its dividend for 13 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Southern Missouri Bancorp	21.36%	12.05%	1.33%
OceanFirst Financial	10.04%	5.35%	0.63%

Volatility & Risk

Southern Missouri Bancorp has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, OceanFirst Financial has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Valuation and Earnings

This table compares Southern Missouri Bancorp and OceanFirst Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern Missouri Bancorp	$305.35 million	2.44	$58.58 million	$5.99	11.28
OceanFirst Financial	$687.16 million	1.55	$70.98 million	$1.17	15.77

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

Summary

Southern Missouri Bancorp beats OceanFirst Financial on 10 of the 17 factors compared between the two stocks.

About Southern Missouri Bancorp

Southern Missouri Bancorp, Inc. operates as the bank holding company for Southern Bank that provides banking and financial services to individuals and corporate customers in the United States. The company offers deposits products, including interest-bearing and noninterest-bearing transaction accounts, saving accounts, certificates of deposit, retirement savings plans, and money market deposit accounts. It also provides loans, such as residential mortgage, commercial real estate, construction, and commercial business loans; and consumer loans comprising home equity, direct and indirect automobile loans, second mortgages, mobile home loans, and loans secured by deposits. In addition, the company offers fiduciary and investment management services; commercial and consumer insurance; online and mobile banking services; and debit or credit cards. The company was founded in 1887 and is headquartered in Poplar Bluff, Missouri.

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.