Comparing Oak Valley Bancorp (NASDAQ:OVLY) & Investar (NASDAQ:ISTR)

Oak Valley Bancorp (NASDAQ:OVLY) and Investar (NASDAQ:ISTR) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Insider & Institutional Ownership

30.9% of Oak Valley Bancorp shares are held by institutional investors. Comparatively, 50.2% of Investar shares are held by institutional investors. 19.3% of Oak Valley Bancorp shares are held by company insiders. Comparatively, 8.7% of Investar 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

Oak Valley Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 2.3%. Investar pays an annual dividend of $0.42 per share and has a dividend yield of 2.3%. Oak Valley Bancorp pays out 19.9% of its earnings in the form of a dividend. Investar pays out 20.6% 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. Oak Valley Bancorp has raised its dividend for 11 consecutive years.

Earnings and Valuation

This table compares Oak Valley Bancorp and Investar”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oak Valley Bancorp	$76.59 million	2.89	$24.95 million	$3.02	8.78
Investar	$82.41 million	2.21	$20.25 million	$2.04	9.07

Oak Valley Bancorp has higher earnings, but lower revenue than Investar. Oak Valley Bancorp is trading at a lower price-to-earnings ratio than Investar, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Oak Valley Bancorp has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500. Comparatively, Investar has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Oak Valley Bancorp and Investar, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oak Valley Bancorp	0	0	0	0	0.00
Investar	0	1	1	0	2.50

Investar has a consensus target price of $20.50, suggesting a potential upside of 10.81%. Given Investar’s stronger consensus rating and higher probable upside, analysts clearly believe Investar is more favorable than Oak Valley Bancorp.

Profitability

This table compares Oak Valley Bancorp and Investar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oak Valley Bancorp	28.03%	14.28%	1.35%
Investar	12.81%	8.00%	0.67%

Summary

Oak Valley Bancorp beats Investar on 9 of the 17 factors compared between the two stocks.

About Oak Valley Bancorp

Oak Valley Bancorp operates as the bank holding company for Oak Valley Community Bank that provides a range of commercial banking services to individuals and small to medium-sized businesses in the Central Valley and the Eastern Sierras. The company's deposits products include checking and savings, money market, health savings, and individual retirement accounts, as well as certificates of deposit. It also offers commercial real estate loans, commercial business lending and trade finance, and small business administration lending, as well as consumer loans, including automobile loans, home mortgages, credit lines, and other personal loans. In addition, the company provides online and mobile banking, remote deposit capture, merchant, night depository, extended hours, wire transfer of funds, note collection services, and automated teller machines. The company was incorporated in 1990 and is headquartered in Oakdale, California.

About Investar

Investar Holding Corporation operates as the bank holding company for Investar Bank that provides a range of commercial banking products to individuals, professionals, and small to medium-sized businesses in south Louisiana, southeast Texas, and Alabama in the United States. The company offers various deposit products and services, such as savings, checking, money market, and individual retirement accounts, as well as various certificates of deposit; debit and credit cards; internet, mobile, and video banking services; and reciprocal deposit products. It also provides commercial real estate loans; commercial and industrial loans, including working capital lines of credit and equipment loans; loans for the construction of commercial projects, and single family residential and multifamily properties; one-to-four family residential real estate loans, such as second mortgage loans; and consumer loans, such as secured and unsecured installment and term loans, home equity loans and lines of credit, and auto loans, as well as loans for personal, family, and household purposes. In addition, the company offers treasury management products, including remote deposit capture, lockbox payment processing, virtual vault, positive pay, ACH origination, wire transfer, investment sweep accounts, and business internet banking services. Further, it provides various other banking services, such as cashiers' checks, direct deposit of payroll and social security checks, night depository, bank-by-mail, automated teller machines, electronic statements, interactive teller machines, online account opening, and mobile wallet payment services. Investar Holding Corporation was founded in 2006 and is headquartered in Baton Rouge, Louisiana.