Head-To-Head Comparison: Ohio Valley Banc (NASDAQ:OVBC) vs. Orrstown Financial Services (NASDAQ:ORRF)

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

Dividends

Ohio Valley Banc pays an annual dividend of $0.88 per share and has a dividend yield of 4.1%. Orrstown Financial Services pays an annual dividend of $0.80 per share and has a dividend yield of 3.2%. Ohio Valley Banc pays out 36.5% of its earnings in the form of a dividend. Orrstown Financial Services pays out 23.9% 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. Ohio Valley Banc has raised its dividend for 1 consecutive years. Ohio Valley Banc is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Ohio Valley Banc and Orrstown Financial Services’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ohio Valley Banc	$74.49 million	1.37	$12.63 million	$2.41	8.86
Orrstown Financial Services	$175.55 million	1.55	$35.66 million	$3.35	7.56

Orrstown Financial Services has higher revenue and earnings than Ohio Valley Banc. Orrstown Financial Services 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.

Institutional and Insider Ownership

22.1% of Ohio Valley Banc shares are held by institutional investors. Comparatively, 44.3% of Orrstown Financial Services shares are held by institutional investors. 5.3% of Ohio Valley Banc shares are held by insiders. Comparatively, 6.2% of Orrstown Financial Services shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Ohio Valley Banc has a beta of 0.09, indicating that its share price is 91% less volatile than the S&P 500. Comparatively, Orrstown Financial Services has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500.

Profitability

This table compares Ohio Valley Banc and Orrstown Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ohio Valley Banc	14.70%	8.16%	0.87%
Orrstown Financial Services	18.99%	14.31%	1.19%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Ohio Valley Banc and Orrstown Financial Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ohio Valley Banc	0	0	0	0	N/A
Orrstown Financial Services	0	1	2	0	2.67

Orrstown Financial Services has a consensus price target of $30.00, indicating a potential upside of 18.46%. Given Orrstown Financial Services’ higher possible upside, analysts plainly believe Orrstown Financial Services is more favorable than Ohio Valley Banc.

Summary

Orrstown Financial Services beats Ohio Valley Banc on 13 of the 16 factors compared between the two stocks.

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.

About Orrstown Financial Services

Orrstown Financial Services, Inc. operates as the financial holding company for Orrstown Bank that provides commercial banking and financial advisory services to retail, commercial, non-profit, and government clients in the United States. It accepts various deposits, including checking, savings, time, demand, and money market deposits, as well as certificates of deposit. The company also offers commercial loans, such as commercial real estate, equipment, construction, working capital, and other commercial purpose loans, as well as industrial loans; consumer loans, such as home equity and other consumer loans, as well as home equity lines of credit; residential mortgage loans; acquisition and development loans; municipal loans; and installment and other loans. In addition, it provides renders services as trustee, executor, administrator, guardian, managing agent, custodian, and investment advisor, as well as other fiduciary services under the Orrstown Financial Advisors name; and retail brokerage services through a third-party broker/dealer arrangement. Further, the company offers fiduciary, investment advisory, insurance, and brokerage services. Orrstown Financial Services, Inc. was founded in 1919 and is headquartered in Shippensburg, Pennsylvania.