Contrasting LCNB (NASDAQ:LCNB) & Ohio Valley Banc (NASDAQ:OVBC)

LCNB (NASDAQ:LCNB) and Ohio Valley Banc (NASDAQ:OVBC) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Profitability

This table compares LCNB and Ohio Valley Banc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LCNB	19.69%	8.92%	1.10%
Ohio Valley Banc	14.31%	8.37%	0.88%

Earnings & Valuation

This table compares LCNB and Ohio Valley Banc”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LCNB	$124.52 million	2.24	$23.12 million	$1.73	11.29
Ohio Valley Banc	$94.21 million	2.34	$15.60 million	$3.01	15.57

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for LCNB and Ohio Valley Banc, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LCNB	0	0	1	1	3.50
Ohio Valley Banc	0	0	1	0	3.00

Insider and Institutional Ownership

34.7% of LCNB shares are held by institutional investors. Comparatively, 22.1% of Ohio Valley Banc shares are held by institutional investors. 5.7% of LCNB shares are held by insiders. Comparatively, 7.2% of Ohio Valley Banc shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

LCNB has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, Ohio Valley Banc has a beta of 0.04, indicating that its share price is 96% less volatile than the S&P 500.

Dividends

LCNB pays an annual dividend of $0.88 per share and has a dividend yield of 4.5%. Ohio Valley Banc pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. LCNB pays out 50.9% of its earnings in the form of a dividend. Ohio Valley Banc pays out 33.2% 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. LCNB has increased its dividend for 7 consecutive years and Ohio Valley Banc has increased its dividend for 3 consecutive years. LCNB is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

LCNB beats Ohio Valley Banc on 11 of the 16 factors compared between the two stocks.

About LCNB

LCNB Corp. operates as the financial holding company for LCNB National Bank that provides banking services in Ohio. Its deposit products include checking accounts, demand deposits, savings accounts, NOW and money market deposits, as well as individual retirement accounts and time certificates. The company's loan products comprise commercial and industrial, commercial and residential real estate, agricultural, construction, and small business administration loans; and residential mortgage loans that consists of loans for purchasing or refinancing personal residences, home equity lines of credit, and loans for commercial or consumer purposes secured by residential mortgages. It offers consumer loans, such as automobile, recreational vehicles, boat, home improvement, and personal loans. In addition, the company provides trust administration, estate settlement, and fiduciary services; and investment management services for trusts, agency accounts, individual retirement accounts, and foundations/endowments. Further, it offers investment services and products, including financial needs analysis, mutual funds, securities trading, annuities, and life insurance; and security brokerage services. Additionally, the company provides safe deposit boxes, night depositories, cashier's checks, bank-by-mail, ATMs, cash and transaction services, debit cards, wire transfers, electronic funds transfer, utility bill collections, notary public service, cash management services, telephone banking, PC Internet banking, mobile banking, and other services for individuals and businesses. LCNB Corp. was founded in 1877 and is headquartered in Lebanon, Ohio.

About Ohio Valley Banc

Ohio Valley Banc Corp. operates as the bank holding company for The Ohio Valley Bank Company that provides commercial and consumer banking products and services. The company operates in two segments, Banking and Consumer Finance. It accepts various deposit products, including checking, savings, time, and money market accounts, as well as individual retirement accounts, demand deposits, NOW accounts, and certificates of deposit. The company also provides various residential real estate loans, including one-to four-family residential mortgages; commercial loans for securing equipment, inventory, stock, commercial real estate, and rental property; and consumer loans secured by automobiles, mobile homes, recreational vehicles, and other personal property, as well as personal loans, unsecured credit card receivables, floor plan and student loans, and construction loans. In addition, it offers safe deposit box, wire transfer, credit card, home equity loans, and Internet banking services; and financial management online services, such as cash management and news updates related to repossession auctions, current rates, and general bank news. Further, the company provides automatic teller machines (ATMs), consumer finance, seasonal tax preparation, commercial property, and various liability insurance services, as well as trust and online-only consumer direct mortgage services. The company owns and operates ATMs, including off-site ATMs. It operates offices in Ohio and West Virginia. The company was founded in 1872 and is based in Gallipolis, Ohio.