Investar Holding Corporation (NASDAQ: ISTR) and Northrim BanCorp (NASDAQ:NRIM) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Risk & Volatility

Investar Holding Corporation has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500. Comparatively, Northrim BanCorp has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.

Dividends

Investar Holding Corporation pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Northrim BanCorp pays an annual dividend of $0.88 per share and has a dividend yield of 2.5%. Investar Holding Corporation pays out 11.7% of its earnings in the form of a dividend. Northrim BanCorp pays out 43.8% 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.

Earnings & Valuation

This table compares Investar Holding Corporation and Northrim BanCorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Investar Holding Corporation $37.75 million 5.42 $8.96 million $1.03 22.86
Northrim BanCorp $95.00 million 2.52 $13.89 million $2.01 17.21

Northrim BanCorp has higher revenue and earnings than Investar Holding Corporation. Northrim BanCorp is trading at a lower price-to-earnings ratio than Investar Holding Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for Investar Holding Corporation and Northrim BanCorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Investar Holding Corporation 0 1 1 0 2.50
Northrim BanCorp 0 0 0 0 N/A

Investar Holding Corporation currently has a consensus price target of $26.00, suggesting a potential upside of 10.40%. Given Investar Holding Corporation’s higher probable upside, analysts plainly believe Investar Holding Corporation is more favorable than Northrim BanCorp.

Insider and Institutional Ownership

61.0% of Investar Holding Corporation shares are held by institutional investors. Comparatively, 71.2% of Northrim BanCorp shares are held by institutional investors. 9.8% of Investar Holding Corporation shares are held by company insiders. Comparatively, 2.9% of Northrim BanCorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Investar Holding Corporation and Northrim BanCorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Investar Holding Corporation 15.78% 5.94% 0.66%
Northrim BanCorp 15.61% 7.56% 1.00%

Summary

Northrim BanCorp beats Investar Holding Corporation on 8 of the 15 factors compared between the two stocks.

About Investar Holding Corporation

Investar Holding Corporation is financial holding company that conducts its operations through, Investar Bank (the Bank), which is a commercial bank. The Company offers a range of commercial and retail lending products throughout its market areas, including business loans to small to medium-sized businesses, as well as loans to individuals. It serves its primary markets of Baton Rouge, New Orleans, Hammond and Lafayette, Louisiana, and their surrounding metropolitan areas from its office located in Baton Rouge and from approximately 10 additional service branches. The Bank’s other banking services include cashiers’ checks, direct deposit of payroll and Social Security checks, night depository, bank-by-mail, automated teller machines with deposit automation and debit cards. The Company’s business lending products include owner-occupied commercial real estate loans, construction loans, and commercial and industrial loans, such as term loans, equipment financing and lines of credit.

About Northrim BanCorp

Northrim BanCorp, Inc. is a bank holding company. The Company operates in two segments: Community Banking and Home Mortgage Lending. The Community Banking segment’s principal business focus is the offering of loan and deposit products to business and consumer customers in its primary market areas. The Community Banking segment operates approximately 10 branches throughout Alaska. The Home Mortgage Lending segment’s principal business focus is the origination and sale of mortgage loans for one- to four-family residential properties. Its loan products include short and medium-term commercial loans, commercial credit lines, construction and real estate loans, and consumer loans. Its commercial loan portfolio includes both secured and unsecured loans for working capital and expansion. It provides construction lending for commercial real estate projects. It offers personal loans for automobiles, recreational vehicles, boats, and other larger consumer purchases.

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