Contrasting Heritage Oaks Bancorp (HEOP) & Bank of Marin Bancorp (BMRC)

Heritage Oaks Bancorp (NASDAQ: HEOP) and Bank of Marin Bancorp (NASDAQ:BMRC) are both financials companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Institutional & Insider Ownership

63.1% of Heritage Oaks Bancorp shares are owned by institutional investors. Comparatively, 41.7% of Bank of Marin Bancorp shares are owned by institutional investors. 31.3% of Heritage Oaks Bancorp shares are owned by insiders. Comparatively, 5.2% of Bank of Marin Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Heritage Oaks Bancorp pays an annual dividend of $0.24 per share. Bank of Marin Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 1.7%. Heritage Oaks Bancorp pays out 48.0% of its earnings in the form of a dividend. Bank of Marin Bancorp pays out 45.0% 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. Bank of Marin Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings for Heritage Oaks Bancorp and Bank of Marin Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Heritage Oaks Bancorp 0 0 0 0 N/A
Bank of Marin Bancorp 0 3 0 0 2.00

Bank of Marin Bancorp has a consensus target price of $73.67, indicating a potential upside of 9.70%.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Heritage Oaks Bancorp N/A N/A N/A $0.50 N/A
Bank of Marin Bancorp $84.86 million 5.48 $15.98 million $2.58 26.03

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

Profitability

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

Net Margins Return on Equity Return on Assets
Heritage Oaks Bancorp 22.37% 8.53% 0.91%
Bank of Marin Bancorp 18.83% 8.57% 0.98%

Summary

Bank of Marin Bancorp beats Heritage Oaks Bancorp on 6 of the 10 factors compared between the two stocks.

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.

Bank of Marin Bancorp Company Profile

Bank of Marin Bancorp (Bancorp) is the holding company for Bank of Marin (the Bank). The Company’s business banking focus is on small to medium-sized businesses, professionals and not-for-profit organizations. The Company operates through 23 offices in Marin, Sonoma, San Francisco, Napa and Alameda counties. It makes international banking services available to its customers indirectly through other financial institutions, with whom it has correspondent banking relationships. The Company offers a range of commercial and retail deposit and lending programs. Its lending categories include commercial real estate loans, commercial and industrial loans, construction financing, consumer loans and home equity lines of credit. The Company offers a range of personal and business checking and savings accounts, and time deposit alternatives.

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