Oriental Financial Group Stock Downgraded (OFG)

NEW YORK ( TheStreet) -- Oriental Financial Group (NYSE: OFG) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and relatively poor performance when compared with the S&P 500 during the past year.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 43.5% when compared to the same quarter one year ago, falling from $26.47 million to $14.96 million.
  • In its most recent trading session, OFG has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, ORIENTAL FINANCIAL GROUP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • OFG, with its decline in revenue, slightly underperformed the industry average of 16.5%. Since the same quarter one year prior, revenues fell by 21.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ORIENTAL FINANCIAL GROUP INC's earnings per share declined by 39.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ORIENTAL FINANCIAL GROUP INC turned its bottom line around by earning $0.64 versus -$0.29 in the prior year. This year, the market expects an improvement in earnings ($0.91 versus $0.64).

Oriental Financial Group Inc., a financial holding company, provides various banking and financial services primarily in Puerto Rico. It operates in three segments: Banking, Wealth Management, and Treasury. The company has a P/E ratio of 16.4, below the average banking industry P/E ratio of 16.6 and below the S&P 500 P/E ratio of 17.7. Oriental Financial Group has a market cap of $433.4 million and is part of the financial sector and banking industry. Shares are down 12.1% year to date as of the close of trading on Thursday.

You can view the full Oriental Financial Group Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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