LCNB (NASDAQ: LCNB) and Heritage Oaks Bancorp (NASDAQ:HEOP) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, profitability, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares LCNB and Heritage Oaks Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LCNB 23.84% 8.88% 0.99%
Heritage Oaks Bancorp 22.37% 8.53% 0.91%

Analyst Recommendations

This is a breakdown of current ratings and target prices for LCNB and Heritage Oaks Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LCNB 0 2 0 0 2.00
Heritage Oaks Bancorp 0 0 0 0 N/A

LCNB presently has a consensus target price of $24.00, suggesting a potential upside of 17.94%. Given LCNB’s higher possible upside, research analysts plainly believe LCNB is more favorable than Heritage Oaks Bancorp.

Valuation & Earnings

This table compares LCNB and Heritage Oaks Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LCNB $54.60 million 3.73 $12.48 million $1.30 15.65
Heritage Oaks Bancorp N/A N/A N/A $0.50 26.70

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

Institutional and Insider Ownership

37.4% of LCNB shares are held by institutional investors. Comparatively, 63.1% of Heritage Oaks Bancorp shares are held by institutional investors. 4.2% of LCNB shares are held by company insiders. Comparatively, 31.3% of Heritage Oaks 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.

Dividends

LCNB pays an annual dividend of $0.64 per share and has a dividend yield of 3.1%. Heritage Oaks Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.8%. LCNB pays out 49.2% of its earnings in the form of a dividend. Heritage Oaks Bancorp pays out 48.0% 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

LCNB beats Heritage Oaks Bancorp on 7 of the 11 factors compared between the two stocks.

LCNB Company Profile

LCNB Corp. (LCNB) is a financial holding company. The Company’s subsidiary includes LCNB National Bank (the Bank). The Bank offers commercial and personal banking services. Its services include safe deposit boxes, night depositories, cashier’s checks, utility bill collections, notary public service, mobile banking and other services tailored for both individuals and businesses. Its loan products include commercial and industrial loans, commercial and residential real estate loans, various types of consumer loans and small business administration loans. Its investment portfolio includes securities available-for-sale, such as the United States Treasury notes, the United States Agency notes, Certificates of deposit, and Equity securities. Its deposit services include checking accounts, negotiable order of withdrawal accounts, savings accounts, money market deposit accounts, lifetime checking accounts, individual retirement accounts and certificates of deposit.

Heritage Oaks Bancorp Company Profile

Heritage Oaks Bancorp is a bank holding company for Heritage Oaks Bank (the Bank). The Bank is a community-oriented financial services company that provides banking products and services to small and medium sized businesses and consumers. As of December 31, 2016, its products and services were offered primarily through 12 retail branches located on the Central Coast of California, in San Luis Obispo and Santa Barbara Counties and through other direct channels, including a loan production office in Ventura County. The Bank offers to its commercial clients commercial loans secured by real estate, other commercial loans and lines of credit, agricultural loans, construction financing, other real estate loans and small business administration loans. Its deposit products offered include personal and business checking and savings accounts, time deposit accounts, individual retirement accounts (IRAs), health savings accounts (HSAs), and money market accounts.

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