Contrasting Northeast Bancorp (NASDAQ:NBN) and Oak Valley Bancorp (NASDAQ:OVLY)

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

Analyst Recommendations

This is a summary of recent recommendations for Oak Valley Bancorp and Northeast Bancorp, 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
Northeast Bancorp	0	1	2	0	2.67

Northeast Bancorp has a consensus price target of $143.50, indicating a potential upside of 13.78%. Given Northeast Bancorp’s higher probable upside, analysts plainly believe Northeast Bancorp is more favorable than Oak Valley Bancorp.

Insider & Institutional Ownership

30.9% of Oak Valley Bancorp shares are owned by institutional investors. 13.9% of Oak Valley Bancorp shares are owned by insiders. Comparatively, 14.2% of Northeast Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Oak Valley Bancorp and Northeast Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oak Valley Bancorp	$95.04 million	3.01	$23.91 million	$2.82	12.04
Northeast Bancorp	$385.07 million	2.69	$107.48 million	$12.72	9.92

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

Dividends

Oak Valley Bancorp pays an annual dividend of $0.75 per share and has a dividend yield of 2.2%. Northeast Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Oak Valley Bancorp pays out 26.6% of its earnings in the form of a dividend. Northeast Bancorp pays out 0.3% 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 increased 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.

Volatility & Risk

Oak Valley Bancorp has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500. Comparatively, Northeast Bancorp has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Profitability

This table compares Oak Valley Bancorp and Northeast Bancorp’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%
Northeast Bancorp	27.91%	19.35%	2.22%

Summary

Northeast Bancorp beats Oak Valley Bancorp on 11 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 Northeast Bancorp

Northeast Bank provides banking services to individual and corporate customers in Maine. The company's deposit products include demand deposit, NOW, money market, savings, certificate of deposit, and individual retirement accounts, as well as checking accounts. Its loan portfolio comprises residential mortgage loans; multi-family and other commercial real estate loans; commercial and industrial loans, such as term loans, lines of credit and equipment, and receivables financing; consumer loans comprising mobile home and overdraft, and deposit-secured loans; and small business administration loans. In addition, the company offers telephone banking, online banking and bill payment, mobile banking, cash management, and remote deposit capture services, as well as debit and credit card, ATM, electronic transfer, and check services. Further, it provides various services, such as money market, merchant, and payroll and HR. Northeast Bank was founded in 1872 and is headquartered in Portland, Maine.