Live Oak Bancshares (NASDAQ: LOB) and WashingtonFirst Bankshares (NASDAQ:WFBI) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, dividends, valuation and risk.
Risk & Volatility
Live Oak Bancshares has a beta of -0.03, indicating that its share price is 103% less volatile than the S&P 500. Comparatively, WashingtonFirst Bankshares has a beta of 0.15, indicating that its share price is 85% less volatile than the S&P 500.
This is a breakdown of recent ratings and recommmendations for Live Oak Bancshares and WashingtonFirst Bankshares, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Live Oak Bancshares||0||1||2||0||2.67|
Live Oak Bancshares currently has a consensus target price of $27.67, suggesting a potential upside of 5.20%. WashingtonFirst Bankshares has a consensus target price of $28.00, suggesting a potential downside of 18.27%. Given Live Oak Bancshares’ stronger consensus rating and higher possible upside, research analysts clearly believe Live Oak Bancshares is more favorable than WashingtonFirst Bankshares.
Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. WashingtonFirst Bankshares pays an annual dividend of $0.14 per share and has a dividend yield of 0.4%. Live Oak Bancshares pays out 4.8% of its earnings in the form of a dividend. WashingtonFirst Bankshares pays out 9.3% 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. Live Oak Bancshares is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Live Oak Bancshares and WashingtonFirst Bankshares’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Live Oak Bancshares||$276.39 million||3.79||$100.50 million||$2.51||10.48|
|WashingtonFirst Bankshares||$101.35 million||4.24||$18.00 million||$1.51||22.69|
Live Oak Bancshares has higher revenue and earnings than WashingtonFirst Bankshares. Live Oak Bancshares is trading at a lower price-to-earnings ratio than WashingtonFirst Bankshares, indicating that it is currently the more affordable of the two stocks.
This table compares Live Oak Bancshares and WashingtonFirst Bankshares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Live Oak Bancshares||36.36%||16.85%||2.13%|
Institutional and Insider Ownership
41.0% of Live Oak Bancshares shares are owned by institutional investors. Comparatively, 55.9% of WashingtonFirst Bankshares shares are owned by institutional investors. 30.1% of Live Oak Bancshares shares are owned by company insiders. Comparatively, 20.7% of WashingtonFirst Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Live Oak Bancshares beats WashingtonFirst Bankshares on 12 of the 16 factors compared between the two stocks.
About Live Oak Bancshares
Live Oak Bancshares, Inc. is a bank holding company. The Company conducts business operations primarily through its commercial bank subsidiary, Live Oak Banking Company (the Bank). The Bank specializes in providing lending services to small businesses nationwide in targeted industries. The loans originated by the Bank are guaranteed by the small business administration (SBA). The Company’s loan portfolio includes commercial and industrial loans; construction and development loans; commercial real estate, and commercial land. The Company’s investment securities include the United States Government agencies, residential mortgage-backed securities and mutual fund. The Company’s deposits include non-interest-bearing deposits and interest-bearing deposits, such as interest-bearing checking, money market and time deposits.
About WashingtonFirst Bankshares
WashingtonFirst Bankshares, Inc. is a bank holding company. The Company, through its subsidiary, WashingtonFirst Bank (the Bank), operates banking offices throughout the Washington, D.C. metropolitan area. The Company’s segments include Commercial Bank, Mortgage Bank, Wealth Management and Other. In addition, the Company provides wealth management services through its subsidiary, 1st Portfolio, Inc. (Wealth Advisors), located in Fairfax, Virginia, and mortgage banking services through the Bank’s subsidiary, WashingtonFirst Mortgage Corporation, which operates in two locations: Fairfax, Virginia and Rockville, Maryland. The Company offers a range of commercial banking products and services to small-to-medium sized businesses, not-for-profit organizations, professional service firms and individuals in the greater Washington, D.C. metropolitan area.
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