Head to Head Survey: Oak Valley Bancorp (NASDAQ:OVLY) & Bankwell Financial Group (NASDAQ:BWFG)

Oak Valley Bancorp (NASDAQ:OVLY) and Bankwell Financial Group (NASDAQ:BWFG) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Oak Valley Bancorp and Bankwell Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oak Valley Bancorp	0	0	1	0	3.00
Bankwell Financial Group	0	1	2	1	3.00

Bankwell Financial Group has a consensus target price of $67.50, indicating a potential upside of 2.03%. Given Bankwell Financial Group’s higher possible upside, analysts clearly believe Bankwell Financial Group is more favorable than Oak Valley Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Oak Valley Bancorp	24.05%	11.31%	1.17%
Bankwell Financial Group	19.80%	13.94%	1.27%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oak Valley Bancorp	$95.04 million	3.03	$23.91 million	$2.82	12.16
Bankwell Financial Group	$207.71 million	2.54	$35.20 million	$5.35	12.37

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

Volatility & Risk

Oak Valley Bancorp has a beta of 0.21, indicating that its share price is 79% less volatile than the S&P 500. Comparatively, Bankwell Financial Group has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500.

Dividends

Oak Valley Bancorp pays an annual dividend of $0.75 per share and has a dividend yield of 2.2%. Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. Oak Valley Bancorp pays out 26.6% of its earnings in the form of a dividend. Bankwell Financial Group pays out 15.0% 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. Oak Valley Bancorp has raised its dividend for 11 consecutive years. Oak Valley Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

30.9% of Oak Valley Bancorp shares are owned by institutional investors. Comparatively, 35.8% of Bankwell Financial Group shares are owned by institutional investors. 13.9% of Oak Valley Bancorp shares are owned by company insiders. Comparatively, 21.0% of Bankwell Financial Group 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.

Summary

Bankwell Financial Group beats Oak Valley Bancorp on 13 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 Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans to finance insurance premiums; overdraft lines of credit; and unsecured personal loans. It operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.