Comparing Bank OZK (NASDAQ:OZK) and Columbia Banking System (NASDAQ:COLB)

Columbia Banking System (NASDAQ:COLB) and Bank OZK (NASDAQ:OZK) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

92.5% of Columbia Banking System shares are owned by institutional investors. Comparatively, 86.2% of Bank OZK shares are owned by institutional investors. 0.6% of Columbia Banking System shares are owned by insiders. Comparatively, 6.7% of Bank OZK shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Columbia Banking System and Bank OZK, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Banking System	0	8	4	0	2.33
Bank OZK	1	7	1	0	2.00

Columbia Banking System presently has a consensus target price of $31.25, suggesting a potential upside of 21.93%. Bank OZK has a consensus target price of $50.38, suggesting a potential upside of 11.01%. Given Columbia Banking System’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Columbia Banking System is more favorable than Bank OZK.

Profitability

This table compares Columbia Banking System and Bank OZK’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Columbia Banking System	17.99%	11.21%	1.10%
Bank OZK	25.83%	13.90%	1.93%

Risk & Volatility

Columbia Banking System has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500. Comparatively, Bank OZK has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500.

Valuation & Earnings

This table compares Columbia Banking System and Bank OZK”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Banking System	$1.93 billion	2.79	$533.67 million	$2.54	10.09
Bank OZK	$1.66 billion	3.10	$716.46 million	$6.14	7.39

Bank OZK has lower revenue, but higher earnings than Columbia Banking System. Bank OZK is trading at a lower price-to-earnings ratio than Columbia Banking System, indicating that it is currently the more affordable of the two stocks.

Dividends

Columbia Banking System pays an annual dividend of $1.44 per share and has a dividend yield of 5.6%. Bank OZK pays an annual dividend of $1.68 per share and has a dividend yield of 3.7%. Columbia Banking System pays out 56.7% of its earnings in the form of a dividend. Bank OZK pays out 27.4% 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. Bank OZK has raised its dividend for 29 consecutive years.

Summary

Bank OZK beats Columbia Banking System on 10 of the 17 factors compared between the two stocks.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.

About Bank OZK

Bank OZK provides various retail and commercial banking services for individuals and businesses in the United States. The company offers deposit services, including non-interest bearing checking, interest bearing transaction, business sweep, savings, money market, individual retirement, and other accounts, as well as time and reciprocal deposits. It also provides trust and wealth services, such as personal trusts, custodial accounts, investment management accounts, and retirement accounts, as well as corporate trust services, including trustee, paying agent and registered transfer agent services, and other related services. In addition, the company offers treasury management services comprising automated clearing house, wire transfer, transaction reporting, wholesale lockbox, remote deposit capture, automated credit line transfer, reconciliation, positive pay, commercial card, and other services, as well as zero balance and investment sweep accounts. Further, it provides real estate, consumer, small business, indirect recreational vehicle and marine, equipment, agricultural, commercial and industrial, government guaranteed, lines of credit, homebuilder, and affordable housing loans; lender and structured, business aviation, and subscription financing services; and mortgage and other lending products. Additionally, the company offers ATMs; telephone, online, and mobile banking services; credit and debit cards; safe deposit boxes; and other products and services. The company was formerly known as Bank of the Ozarks and changed its name to Bank OZK in July 2018. Bank OZK was founded in 1903 and is headquartered in Little Rock, Arkansas.