Financial Analysis: Bridge Capital Holdings (BBNK) & Live Oak Bancshares (LOB)
Bridge Capital Holdings (NASDAQ: BBNK) and Live Oak Bancshares (NASDAQ:LOB) are both small-cap commercial banks companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.
This is a breakdown of current ratings for Bridge Capital Holdings and Live Oak Bancshares, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Bridge Capital Holdings||0||0||0||0||N/A|
|Live Oak Bancshares||0||1||2||0||2.67|
Live Oak Bancshares has a consensus target price of $25.67, suggesting a potential upside of 7.39%. Given Live Oak Bancshares’ higher probable upside, analysts clearly believe Live Oak Bancshares is more favorable than Bridge Capital Holdings.
Earnings and Valuation
This table compares Bridge Capital Holdings and Live Oak Bancshares’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Bridge Capital Holdings||N/A||N/A||N/A||$1.14||26.14|
|Live Oak Bancshares||$150.81 million||6.32||$13.77 million||$0.93||25.70|
Live Oak Bancshares has higher revenue and earnings than Bridge Capital Holdings. Live Oak Bancshares is trading at a lower price-to-earnings ratio than Bridge Capital Holdings, indicating that it is currently the more affordable of the two stocks.
Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Bridge Capital Holdings does not pay a dividend. Live Oak Bancshares pays out 12.9% of its earnings in the form of a dividend.
Risk & Volatility
Bridge Capital Holdings has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, Live Oak Bancshares has a beta of -0.09, indicating that its share price is 109% less volatile than the S&P 500.
Institutional and Insider Ownership
35.8% of Live Oak Bancshares shares are held by institutional investors. 30.1% of Live Oak Bancshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares Bridge Capital Holdings and Live Oak Bancshares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Bridge Capital Holdings||16.16%||8.27%||0.85%|
|Live Oak Bancshares||17.68%||13.60%||1.72%|
Live Oak Bancshares beats Bridge Capital Holdings on 9 of the 12 factors compared between the two stocks.
About Bridge Capital Holdings
Bridge Capital Holdings is the bank holding company for Bridge Bank, National Association (the Bank). The Bank’s lending solutions include working capital lines of credit, structured finance (asset-based lending and factoring), 7(a) and 504 Small Business Administration (SBA) loans, commercial real estate loans, sustainable energy project financing, growth capital loans, equipment financing, letters of credit and commercial credit cards. The Bank’s depository and corporate banking services include cash and treasury management solutions, interest-bearing term deposit accounts, checking accounts, Automated Clearing House (ACH) payment and wire solutions, fraud protection, remote deposit capture, courier services and online banking. The Bank’s international banking services include foreign exchange (FX payments and hedging), letters of credit, and import and export financing. The Bank provides banking services to businesses located across the San Francisco Bay Area.
About Live Oak Bancshares
Live Oak Bancshares, Inc. is a bank holding company. The Company conducts business operations primarily through its commercial bank subsidiary, Live Oak Banking Company (the Bank). The Bank specializes in providing lending services to small businesses nationwide in targeted industries. The loans originated by the Bank are guaranteed by the small business administration (SBA). The Company’s loan portfolio includes commercial and industrial loans; construction and development loans; commercial real estate, and commercial land. The Company’s investment securities include the United States Government agencies, residential mortgage-backed securities and mutual fund. The Company’s deposits include non-interest-bearing deposits and interest-bearing deposits, such as interest-bearing checking, money market and time deposits.
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