ServisFirst Bancshares (NYSE:SFBS) and Oak Valley Bancorp (NASDAQ:OVLY) Financial Analysis

ServisFirst Bancshares (NYSE:SFBS) and Oak Valley Bancorp (NASDAQ:OVLY) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, profitability, risk, earnings and dividends.

Risk and Volatility

ServisFirst Bancshares has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, Oak Valley Bancorp has a beta of 0.22, indicating that its stock price is 78% less volatile than the S&P 500.

Insider & Institutional Ownership

67.3% of ServisFirst Bancshares shares are owned by institutional investors. Comparatively, 30.9% of Oak Valley Bancorp shares are owned by institutional investors. 6.5% of ServisFirst Bancshares shares are owned by insiders. Comparatively, 13.9% of Oak Valley Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares ServisFirst Bancshares and Oak Valley Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ServisFirst Bancshares	$1.02 billion	4.32	$276.60 million	$3.13	12.85
Oak Valley Bancorp	$95.04 million	3.05	$23.91 million	$2.78	12.38

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ServisFirst Bancshares	32.53%	17.66%	1.89%
Oak Valley Bancorp	24.05%	11.03%	1.15%

Dividends

ServisFirst Bancshares pays an annual dividend of $0.76 per share and has a dividend yield of 1.9%. Oak Valley Bancorp pays an annual dividend of $0.75 per share and has a dividend yield of 2.2%. ServisFirst Bancshares pays out 24.3% of its earnings in the form of a dividend. Oak Valley Bancorp pays out 27.0% 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. ServisFirst Bancshares has raised its dividend for 10 consecutive years and 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.

Analyst Ratings

This is a summary of current ratings and price targets for ServisFirst Bancshares and Oak Valley Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServisFirst Bancshares	1	0	4	0	2.60
Oak Valley Bancorp	0	0	1	0	3.00

ServisFirst Bancshares currently has a consensus target price of $46.50, suggesting a potential upside of 15.61%. Given ServisFirst Bancshares’ higher possible upside, equities analysts plainly believe ServisFirst Bancshares is more favorable than Oak Valley Bancorp.

Summary

ServisFirst Bancshares beats Oak Valley Bancorp on 13 of the 17 factors compared between the two stocks.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.

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.