Bank Of Kentucky Financial (NASDAQ: BKYF) and Ocwen Financial (NYSE:OCN) are both small-cap retail & mortgage banks companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, risk, dividends, institutional ownership and profitability.

Risk & Volatility

Bank Of Kentucky Financial has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Ocwen Financial has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500.

Earnings and Valuation

This table compares Bank Of Kentucky Financial and Ocwen Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank Of Kentucky Financial N/A N/A N/A $2.30 22.17
Ocwen Financial $1.39 billion 0.30 -$199.76 million ($0.75) -4.17

Bank Of Kentucky Financial has higher earnings, but lower revenue than Ocwen Financial. Ocwen Financial is trading at a lower price-to-earnings ratio than Bank Of Kentucky Financial, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

45.9% of Ocwen Financial shares are owned by institutional investors. 2.4% of Ocwen Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Bank Of Kentucky Financial and Ocwen Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank Of Kentucky Financial 21.85% 8.12% 0.86%
Ocwen Financial -7.56% -19.14% -1.49%

Analyst Ratings

This is a summary of recent ratings for Bank Of Kentucky Financial and Ocwen Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank Of Kentucky Financial 0 0 0 0 N/A
Ocwen Financial 0 4 0 0 2.00

Ocwen Financial has a consensus price target of $3.33, suggesting a potential upside of 6.50%. Given Ocwen Financial’s higher possible upside, analysts plainly believe Ocwen Financial is more favorable than Bank Of Kentucky Financial.

About Bank Of Kentucky Financial

The Bank of Kentucky Financial Corporation is a bank holding company. The Company, through its subsidiary The Bank of Kentucky, Inc. (the Bank), is engaged in the banking business. The Bank provides financial services and other financial solutions through 32 offices located in northern Kentucky. The principal products produced and services rendered by the Bank include commercial banking, consumer banking and trust services. The Bank provides a range of commercial banking services to corporations and other business clients that include loans and deposit services, including checking, lockbox services and other treasury management services. The Bank provides banking services to consumers, including checking, savings and money market accounts, as well as certificates of deposits and individual retirement accounts. It also offers specialized services in the areas of fiduciary services and wealth management.

About Ocwen Financial

Ocwen Financial Corporation is a financial services holding company. The Company, through its subsidiaries, originates and services loans. The Company’s segments include Servicing, Lending, and Corporate Items and Other. The Company’s Servicing segment consists of its residential servicing business. The Company’s Lending segment is focused on originating and purchasing conventional and government-insured residential forward and reverse mortgage loans. The Company’s Corporate Items and Other segment includes revenues and expenses of Automotive Capital Services (ACS) and its other business activities. Its servicing clients include some of the financial institutions in the United States, including the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), the Government National Mortgage Association (Ginnie Mae) and non-Agency residential mortgage-backed securities (RMBS) trusts.

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