TowneBank (NASDAQ:TOWN) vs. Origin Bancorp (NASDAQ:OBNK) Critical Contrast

TowneBank (NASDAQ:TOWN – Get Rating) and Origin Bancorp (NASDAQ:OBNK – Get Rating) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, earnings, risk and institutional ownership.

Institutional & Insider Ownership

52.8% of TowneBank shares are held by institutional investors. Comparatively, 47.2% of Origin Bancorp shares are held by institutional investors. 8.1% of TowneBank shares are held by company insiders. Comparatively, 6.3% of Origin Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

TowneBank has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, Origin Bancorp has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for TowneBank and Origin Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TowneBank	0	0	2	0	3.00
Origin Bancorp	0	1	1	0	2.50

Origin Bancorp has a consensus target price of $44.67, suggesting a potential upside of 32.78%. Given Origin Bancorp’s higher probable upside, analysts plainly believe Origin Bancorp is more favorable than TowneBank.

Profitability

This table compares TowneBank and Origin Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TowneBank	25.42%	10.19%	1.15%
Origin Bancorp	22.85%	11.03%	0.99%

Dividends

TowneBank pays an annual dividend of $0.92 per share and has a dividend yield of 3.4%. Origin Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. TowneBank pays out 35.4% of its earnings in the form of a dividend. Origin Bancorp pays out 18.2% 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. TowneBank has raised its dividend for 11 consecutive years and Origin Bancorp has raised its dividend for 4 consecutive years. TowneBank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares TowneBank and Origin Bancorp’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TowneBank	$743.51 million	2.67	$188.99 million	$2.60	10.50
Origin Bancorp	$322.70 million	3.21	$87.71 million	$3.29	10.22

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

Summary

TowneBank beats Origin Bancorp on 12 of the 17 factors compared between the two stocks.

About TowneBank

(Get Rating)

TowneBank engages in the provision of retail and commercial banking services to individuals and small and medium size businesses. It operates through the following segments: Banking, Realty, and Insurance. The Banking segment offers loan and deposit services to retail and commercial customers. The Realty segment focuses on the provision of residential real estate services and originations of a variety of mortgage loans. The Insurance segment includes the provision of full-service commercial and retail insurance, employee benefit services, and travel insurance. The company was founded by R. Scott Morgan on September 3, 1998 and is headquartered in Portsmouth, VA.

About Origin Bancorp

(Get Rating)

Origin Bancorp, Inc. is a bank holding company, which engages in the provision of financial services to small and medium-sized businesses, municipalities, high net worth individuals, and retail clients. The firm’s products and services include lending, deposits, mortgage banking, and insurance. It also offers other banking services such as Internet banking and voice response information, mobile applications, cash management, overdraft protection, direct deposit, safe deposit boxes, U.S. savings bonds, and automatic account transfers. The company was founded in 1991 and is headquartered in Ruston, LA.