Oritani Financial Corp. – Value Analysis (NASDAQ:ORIT) : August 1, 2017

Capitalcube gives Oritani Financial Corp. a score of 54.

Our analysis is based on comparing Oritani Financial Corp. with the following peers – OceanFirst Financial Corp., Kearny Financial Corp., Provident Financial Services, Inc., New York Community Bancorp, Inc., Magyar Bancorp, Inc. and MSB Financial Corp (OCFC-US, KRNY-US, PFS-US, NYCB-US, MGYR-US and MSBF-US).

Fundamental Overview

Oritani Financial Corp. has a fundamental score of 54 and has a relative valuation of UNDERVALUED.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.37 is about median in its peer group.
  • We classify ORIT-US as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
  • ORIT-US has relatively high profit margins while operating with median capital turns.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • ORIT-US‘s return on equity currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • While ORIT-US‘s revenues growth in recent years has been around the peer median, the stock’s below peer median P/E ratio suggests that the market likely sees the company’s long-term growth prospects to be fading.
  • The company’s level of equity capital investment is relatively low and suggests it is milking the business.

Drivers of Margin

  • ORIT-US‘s pre-tax margin suggests relatively low operating costs.
  • The company’s net interest income (net interest income/total revenues) of 86.68% is around peer median suggesting that ORIT-US‘s lending operations does not benefit from any differentiating pricing advantage. However, ORIT-US‘s pre-tax margin is more than the peer median (62.58% compared to 27.80%) suggesting relatively low operating costs.
  • The company’s proportion of fee based income (i.e. non interest income/total revenues) of 13.32% is around peer median. However, ORIT-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) is less than peer median (38.06x compared to 60.29x) — suggesting relatively low fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

Oritani Financial Corp. engages in the business of holding the common stock of Oritani Bank. It also operates as a holding company of limited liability companies that own a variety of real estate investments. The company was founded in 1998 and is headquartered in Township of Washington, NJ.