Critical Survey: Sierra Bancorp (NASDAQ:BSRR) & BEO Bancorp (OTCMKTS:BEOB)

Sierra Bancorp (NASDAQ:BSRR) and BEO Bancorp (OTCMKTS:BEOB) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitability, institutional ownership and valuation.

Profitability

This table compares Sierra Bancorp and BEO Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sierra Bancorp	20.96%	11.82%	1.14%
BEO Bancorp	N/A	N/A	N/A

Insider & Institutional Ownership

55.4% of Sierra Bancorp shares are held by institutional investors. 11.9% of Sierra Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Sierra Bancorp has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, BEO Bancorp has a beta of 0.27, suggesting that its share price is 73% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Sierra Bancorp and BEO Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sierra Bancorp	0	3	2	0	2.40
BEO Bancorp	0	0	0	0	0.00

Sierra Bancorp currently has a consensus target price of $37.00, indicating a potential upside of 1.96%. Given Sierra Bancorp’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Sierra Bancorp is more favorable than BEO Bancorp.

Earnings & Valuation

This table compares Sierra Bancorp and BEO Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sierra Bancorp	$201.98 million	2.37	$42.33 million	$3.12	11.63
BEO Bancorp	$57.76 million	2.24	$16.19 million	$13.20	8.11

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

Dividends

Sierra Bancorp pays an annual dividend of $1.04 per share and has a dividend yield of 2.9%. BEO Bancorp pays an annual dividend of $2.00 per share and has a dividend yield of 1.9%. Sierra Bancorp pays out 33.3% of its earnings in the form of a dividend. BEO Bancorp pays out 15.2% 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. Sierra Bancorp has raised its dividend for 2 consecutive years. Sierra Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Sierra Bancorp beats BEO Bancorp on 15 of the 17 factors compared between the two stocks.

About Sierra Bancorp

Sierra Bancorp operates as the bank holding company for Bank of the Sierra that provides retail and commercial banking services to individuals and businesses in California. It accepts various deposit products, such as checking accounts, savings accounts, money market demand accounts, time deposits, retirement accounts, and sweep accounts. The company's loan products include agricultural, commercial, consumer, real estate, construction, and mortgage loans. It also offers automated teller machines; electronic point-of-sale payment alternatives; online and automated telephone banking services; and remote deposit capture and automated payroll services for business customers. Sierra Bancorp was founded in 1977 and is headquartered in Porterville, California.

About BEO Bancorp

BEO Bancorp operates as the bank holding company for Bank of Eastern Oregon that provides commercial and consumer financing, banking and mortgage lending, and other services in Northeastern Oregon and Southeastern Washington. The company offers checking, money market, time deposits, and savings accounts; and certificates of deposit. It also provides commercial, agricultural, real estate, installment, credit card, mortgage, term, home, construction, farm, and refinancing loans; lines of credit; home enhancement loan programs; Internet banking and bill payment services; business sweep and banking services; and automated teller machines and safe deposit facilities, as well as originates and sells mortgage loans into the secondary market. The company was founded in 1945 and is based in Heppner, Oregon.