Orrstown Financial Services (NASDAQ: ORRF) and Metro Bancorp (NASDAQ:METR) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, profitability and dividends.

Earnings & Valuation

This table compares Orrstown Financial Services and Metro Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Orrstown Financial Services $61.70 million 3.60 $6.62 million $1.22 21.80
Metro Bancorp N/A N/A N/A $1.40 20.14

Orrstown Financial Services has higher revenue and earnings than Metro Bancorp. Metro Bancorp is trading at a lower price-to-earnings ratio than Orrstown Financial Services, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

39.6% of Orrstown Financial Services shares are owned by institutional investors. 5.4% of Orrstown Financial Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Orrstown Financial Services and Metro Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orrstown Financial Services 14.58% 7.15% 0.68%
Metro Bancorp 16.68% 7.88% 0.75%

Analyst Ratings

This is a summary of recent recommendations and price targets for Orrstown Financial Services and Metro Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orrstown Financial Services 0 1 1 0 2.50
Metro Bancorp 0 0 0 0 N/A

Orrstown Financial Services presently has a consensus target price of $28.00, indicating a potential upside of 5.26%. Given Orrstown Financial Services’ higher possible upside, analysts clearly believe Orrstown Financial Services is more favorable than Metro Bancorp.

Dividends

Orrstown Financial Services pays an annual dividend of $0.48 per share and has a dividend yield of 1.8%. Metro Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.0%. Orrstown Financial Services pays out 39.3% of its earnings in the form of a dividend. Metro Bancorp pays out 20.0% 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.

Summary

Orrstown Financial Services beats Metro Bancorp on 6 of the 11 factors compared between the two stocks.

About Orrstown Financial Services

Orrstown Financial Services, Inc. is the bank holding company for Orrstown Bank (the Bank). The Bank is engaged in commercial banking and trust business. The Company operates through Community Banking segment. The Bank’s activities involve accepting demand, time and savings deposits, and granting loans. The Bank grants commercial, residential, consumer and agribusiness loans in its market areas of Cumberland, Franklin, Lancaster and Perry Counties in Pennsylvania and in Washington County, Maryland. The Company’s securities available for sale include debt and equity instruments. Through its trust department, the Bank renders services as trustee, executor, administrator, managing agent, custodian, investment advisor and other fiduciary activities authorized by law under the trade name, Orrstown Financial Advisors (OFA). OFA offers retail brokerage services through a third-party broker or dealer arrangement with Cetera Advisor Networks LLC.

About Metro Bancorp

Metro Bancorp, Inc. is a bank holding company. The Company provides full banking services through its subsidiary, Metro Bank (the Bank), which is a state-chartered bank. The Bank offers its lending and depository services from its main store in Lemoyne, Pennsylvania, and its around 33 other full-service stores located in Cumberland, Dauphin, York, Berks, Lancaster and Lebanon Counties, Pennsylvania. The Bank provides retail and commercial banking services for consumers and small and mid-sized companies. The Bank’s lending and investment activities are funded principally by retail deposits gathered through its retail store office network. The Bank provides a range of retail banking services and products, including free personal checking accounts and business checking accounts, regular savings accounts, money market accounts, interest checking accounts, fixed rate certificates of deposit (CDs), individual retirement accounts, club accounts, and debit card services, among others.

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