OFS Capital Corporation and Amalgamated Financial Corp. are both significant players in the finance sector, yet they present distinct profiles in terms of investment potential and operational focus. A detailed comparison reveals critical differences in valuation, earnings, dividends, and institutional ownership, which may influence investors’ decisions.
Analyst Recommendations and Price Targets
Recent evaluations from MarketBeat show that OFS Capital has a consensus target price of $7.00, suggesting a potential upside of 50.41%. In contrast, Amalgamated Financial’s target price stands at $33.50, indicating a more modest potential upside of 2.06%. Analysts appear to favor OFS Capital, reflecting a belief in its stronger growth potential relative to Amalgamated Financial.
Profitability and Risk Assessment
A closer look at profitability metrics reveals that OFS Capital and Amalgamated Financial exhibit differing financial health. OFS Capital’s annual dividend is $0.68 per share, resulting in a high dividend yield of 14.6%. However, the company pays out 283.3% of its earnings as dividends, raising concerns about sustainability.
On the other hand, Amalgamated Financial pays an annual dividend of $0.56 per share with a yield of only 1.7%, reflecting a more manageable payout ratio of 16.9%. This suggests that Amalgamated Financial maintains a more stable earnings foundation for its dividends.
The profitability comparison highlights that Amalgamated Financial outperforms OFS Capital in terms of net margins, return on equity, and return on assets. This performance underscores the risk associated with investing in OFS Capital, particularly for those seeking stable returns.
Institutional Ownership Insights
Institutional ownership serves as a key indicator of investor confidence. Approximately 10.8% of OFS Capital shares are held by institutional investors, while a substantial 75.9% of Amalgamated Financial shares are owned by institutions. This disparity suggests that many large investors view Amalgamated Financial as a more secure and potentially lucrative investment.
Insider ownership also varies, with 0.5% of OFS Capital shares owned by insiders, compared to 1.3% for Amalgamated Financial. Higher institutional and insider ownership can signal a more robust belief in a company’s long-term prospects.
Company Profiles
OFS Capital specializes in providing flexible capital solutions primarily through debt financing and minority equity investments for U.S.-based middle-market companies. The firm typically invests between $3 million and $35 million in companies across various sectors, including aerospace, healthcare, and consumer products. OFS Capital does not engage in operational turnarounds or startups, focusing instead on established businesses with viable growth opportunities.
Founded in 1923 and headquartered in New York, Amalgamated Financial operates as a bank holding company for Amalgamated Bank. The institution offers a range of commercial and retail banking services, including various deposit products, commercial loans, and investment management services. Amalgamated Financial’s diversified service offerings position it as a comprehensive financial institution catering to both individual and commercial clients.
Conclusion
In summary, while OFS Capital may offer a more significant potential upside in its stock price, Amalgamated Financial demonstrates stronger profitability and more sustainable dividend payouts. The disparity in institutional ownership further emphasizes the market’s preference for Amalgamated Financial. Investors should consider these factors carefully when evaluating their options in the financial services sector.
