Live Oak Bancshares (NASDAQ: LOB) and Bridge Capital Holdings (NASDAQ:BBNK) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Institutional & Insider Ownership

35.7% of Live Oak Bancshares shares are owned by institutional investors. 30.1% of Live Oak Bancshares shares 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.

Valuation and Earnings

This table compares Live Oak Bancshares and Bridge Capital Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Live Oak Bancshares $150.81 million 5.30 $13.77 million $0.93 24.78
Bridge Capital Holdings N/A N/A N/A $1.14 26.14

Live Oak Bancshares has higher revenue and earnings than Bridge Capital Holdings. Live Oak Bancshares is trading at a lower price-to-earnings ratio than Bridge Capital Holdings, indicating that it is currently the more affordable of the two stocks.

Dividends

Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Bridge Capital Holdings does not pay a dividend. Live Oak Bancshares pays out 12.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations for Live Oak Bancshares and Bridge Capital Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Live Oak Bancshares 0 1 2 0 2.67
Bridge Capital Holdings 0 0 0 0 N/A

Live Oak Bancshares currently has a consensus target price of $25.67, indicating a potential upside of 11.35%. Given Live Oak Bancshares’ higher possible upside, equities analysts clearly believe Live Oak Bancshares is more favorable than Bridge Capital Holdings.

Profitability

This table compares Live Oak Bancshares and Bridge Capital Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Live Oak Bancshares 17.68% 13.60% 1.72%
Bridge Capital Holdings 16.16% 8.27% 0.85%

Risk and Volatility

Live Oak Bancshares has a beta of -0.09, suggesting that its stock price is 109% less volatile than the S&P 500. Comparatively, Bridge Capital Holdings has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Summary

Live Oak Bancshares beats Bridge Capital Holdings on 9 of the 12 factors compared between the two stocks.

Live Oak Bancshares Company Profile

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.

Bridge Capital Holdings Company Profile

Bridge Capital Holdings is the bank holding company for Bridge Bank, National Association (the Bank). The Bank’s lending solutions include working capital lines of credit, structured finance (asset-based lending and factoring), 7(a) and 504 Small Business Administration (SBA) loans, commercial real estate loans, sustainable energy project financing, growth capital loans, equipment financing, letters of credit and commercial credit cards. The Bank’s depository and corporate banking services include cash and treasury management solutions, interest-bearing term deposit accounts, checking accounts, Automated Clearing House (ACH) payment and wire solutions, fraud protection, remote deposit capture, courier services and online banking. The Bank’s international banking services include foreign exchange (FX payments and hedging), letters of credit, and import and export financing. The Bank provides banking services to businesses located across the San Francisco Bay Area.

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