Ofg Bancorp (NYSE: OFG)

Sector: Financial Services Industry: Banks - Regional CIK: 0001030469
Market Cap 1.85 Bn
P/B 1.35
P/E 9.29
P/S 2.97
ROIC (Qtr) 10.66
Div Yield % 2.07
Rev 1y % (Qtr) 2.96
Total Debt (Qtr) 582.00 Mn
Debt/Equity (Qtr) 0.42

About

OFG Bancorp, known by its stock symbol OFG, is a financial holding company based in San Juan, Puerto Rico. It operates in three primary segments: Banking, Wealth Management, and Treasury. Through its subsidiaries, including Oriental Bank, Oriental Financial Services, Oriental Insurance, OFG Reinsurance, and OFG Ventures, OFG Bancorp offers comprehensive banking and financial services to its clients. The company's main subsidiary, Oriental Bank, is a full-service Puerto Rico commercial bank with a network of 42 branches in Puerto Rico and two branches...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 196.78M provides strong 27.87x coverage of stock compensation 7.06M, indicating sustainable incentive practices.
  • Strong tangible asset base of 12.07B provides 20.73x coverage of total debt 582M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 180.24M exceeds capital expenditure of 16.54M by 10.90x, indicating strong organic growth funding capability.
  • Operating cash flow of 196.78M provides strong 3.91x coverage of tax liabilities 50.30M, showing excellent fiscal position.
  • Operating cash flow of 196.78M provides strong 5.74x coverage of operating expenses 34.30M, showing operational efficiency.

Bear case

  • Operating cash flow of 196.78M barely covers its investment activities of (673.06M), with a coverage ratio of -0.29, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 196.78M provides thin coverage of dividend payments of (50.14M) with a -3.92 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Retained earnings of 866.83M provide limited buffer against comprehensive income items of (27.30M), which is -31.75x, indicating elevated exposure to market risks.
  • Operating cash flow of 196.78M is outpaced by equity issuance of (103.10M) (-1.91 ratio), indicating concerning reliance on equity markets for funding operations.
  • Tax assets of 7.47M provide limited offset against tax liabilities of 50.30M, which is 0.15x, indicating potential future cash flow pressure from tax obligations.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.12 0.14
EV to Cash from Ops. EV/CFO 7.65 7.21
EV to Debt EV to Debt 2.59 5.20
EV to EBIT EV/EBIT 6.29 14.98
EV to EBITDA EV/EBITDA 5.80 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 8.35 8.87
EV to Market Cap EV to Market Cap 0.81 1.04
EV to Revenue EV/Rev 2.41 -3.76
Price to Book Value [P/B] P/B 1.35 1.17
Price to Earnings [P/E] P/E 9.29 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.98 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 19.20 35.28
Dividend per Basic Share Div per Share (Qtr) 0.85 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 21.06 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 29.69 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 8.78 15.78
Dividend Growth (1y) % Div 1y % (Qtr) -12.37 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 2.64 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -10.58 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) -11.10 61.46
EBT Growth (1y) % EBT 1y % (Qtr) -11.10 61.37
EPS Growth (1y) % EPS 1y % (Qtr) 6.75 76.34
FCF Growth (1y) % FCF 1y % (Qtr) -39.56 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -2.42 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.05 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.24 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.42 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 41.60 147.97
EBIT Margin % EBIT Margin % (Qtr) 38.38 155.41
EBT Margin % EBT Margin % (Qtr) 38.38 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 32.00 115.63