Critical Analysis: Live Oak Bancshares (LOB) vs. Its Rivals

Live Oak Bancshares (NYSE:LOB) is one of 20 publicly-traded companies in the “State Commercial Banks – Fed Reserve System” industry, but how does it compare to its competitors? We will compare Live Oak Bancshares to similar companies based on the strength of its institutional ownership, analyst recommendations, valuation, profitability, earnings, dividends and risk.

Institutional & Insider Ownership

64.0% of Live Oak Bancshares shares are owned by institutional investors. Comparatively, 72.2% of shares of all “State Commercial Banks – Fed Reserve System” companies are owned by institutional investors. 23.4% of Live Oak Bancshares shares are owned by company insiders. Comparatively, 6.7% of shares of all “State Commercial Banks – Fed Reserve System” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Live Oak Bancshares and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Live Oak Bancshares	0	2	0	1	2.67
Live Oak Bancshares Competitors	29	164	196	18	2.50

As a group, “State Commercial Banks – Fed Reserve System” companies have a potential upside of 6.08%. Given Live Oak Bancshares’ competitors higher probable upside, analysts plainly believe Live Oak Bancshares has less favorable growth aspects than its competitors.

Profitability

This table compares Live Oak Bancshares and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Live Oak Bancshares	6.94%	6.61%	0.51%
Live Oak Bancshares Competitors	7.23%	6.94%	0.79%

Valuation and Earnings

This table compares Live Oak Bancshares and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Live Oak Bancshares	$936.15 million	$77.47 million	24.01
Live Oak Bancshares Competitors	$723.51 million	$95.99 million	38.44

Live Oak Bancshares has higher revenue, but lower earnings than its competitors. Live Oak Bancshares is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Risk and Volatility

Live Oak Bancshares has a beta of 2.02, indicating that its stock price is 102% more volatile than the S&P 500. Comparatively, Live Oak Bancshares’ competitors have a beta of 1.01, indicating that their average stock price is 1% more volatile than the S&P 500.

Dividends

Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Live Oak Bancshares pays out 8.1% of its earnings in the form of a dividend. As a group, “State Commercial Banks – Fed Reserve System” companies pay a dividend yield of 2.3% and pay out 67.3% of their earnings in the form of a dividend.

Summary

Live Oak Bancshares competitors beat Live Oak Bancshares on 9 of the 15 factors compared.

Live Oak Bancshares Company Profile

Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various commercial banking products and services to individuals, small businesses, and professionals in North Carolina, the United States. The company accepts various deposit products, including noninterest-bearing demand, as well as interest-bearing checking, money market, savings, and time deposits. It also offers commercial and industrial loans; construction and development loans; owner occupied and non-owner occupied collateral commercial real estate loans; and commercial land loans. In addition, the company provides settlement, accounting, and securitization services for government guaranteed loans; wealth and investment management services to high-net-worth individuals and families; investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies; and an on-site restaurant location to company employees and business visitors. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.