Comparing Eagle Bancorp Montana (NASDAQ:EBMT) and Investar (NASDAQ:ISTR)

Eagle Bancorp Montana (NASDAQ:EBMT) and Investar (NASDAQ:ISTR) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Dividends

Eagle Bancorp Montana pays an annual dividend of $0.57 per share and has a dividend yield of 3.3%. Investar pays an annual dividend of $0.42 per share and has a dividend yield of 1.8%. Eagle Bancorp Montana pays out 52.8% of its earnings in the form of a dividend. Investar pays out 23.5% 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. Eagle Bancorp Montana has increased its dividend for 14 consecutive years. Eagle Bancorp Montana is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations for Eagle Bancorp Montana and Investar, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Bancorp Montana	0	1	0	0	2.00
Investar	0	0	1	0	3.00

Eagle Bancorp Montana presently has a consensus price target of $13.50, indicating a potential downside of 22.01%. Investar has a consensus price target of $20.00, indicating a potential downside of 15.36%. Given Investar’s stronger consensus rating and higher possible upside, analysts clearly believe Investar is more favorable than Eagle Bancorp Montana.

Profitability

This table compares Eagle Bancorp Montana and Investar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Bancorp Montana	7.03%	4.96%	0.41%
Investar	11.35%	6.94%	0.58%

Earnings & Valuation

This table compares Eagle Bancorp Montana and Investar”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Bancorp Montana	$114.34 million	1.21	$10.06 million	$1.08	16.03
Investar	$80.05 million	2.90	$16.68 million	$1.79	13.20

Investar has lower revenue, but higher earnings than Eagle Bancorp Montana. Investar is trading at a lower price-to-earnings ratio than Eagle Bancorp Montana, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

35.7% of Eagle Bancorp Montana shares are owned by institutional investors. Comparatively, 50.2% of Investar shares are owned by institutional investors. 6.7% of Eagle Bancorp Montana shares are owned by insiders. Comparatively, 8.7% of Investar shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Eagle Bancorp Montana has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500. Comparatively, Investar has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Summary

Investar beats Eagle Bancorp Montana on 13 of the 17 factors compared between the two stocks.

About Eagle Bancorp Montana

Eagle Bancorp Montana, Inc. operates as the bank holding company for Opportunity Bank of Montana that provides various retail banking products and services to small businesses and individuals in Montana. It accepts various deposit products, such as checking, savings, money market, and individual retirement accounts, as well as certificates of deposit accounts. The company also provides 1-4 family residential mortgage loans, such as residential mortgages and construction of residential properties; commercial real estate loans, including multi-family dwellings, nonresidential property, commercial construction and development, and farmland loans; and second mortgage/home equity loans. In addition, it offers consumer loans, such as loans secured by collateral other than real estate, such as automobiles, recreational vehicles, and boats; personal loans and lines of credit; commercial business loans consisting of business loans and lines of credit on a secured and unsecured basis; construction loans; agricultural loans; and mortgage loan services. The company operates full-service branches and automated teller machines. Eagle Bancorp Montana, Inc. was founded in 1922 and is headquartered in Helena, Montana.

About Investar

Investar Holding Corporation operates as the bank holding company for Investar Bank that provides a range of commercial banking products to individuals, professionals, and small to medium-sized businesses in south Louisiana, southeast Texas, and Alabama in the United States. The company offers various deposit products and services, such as savings, checking, money market, and individual retirement accounts, as well as various certificates of deposit; debit and credit cards; internet, mobile, and video banking services; and reciprocal deposit products. It also provides commercial real estate loans; commercial and industrial loans, including working capital lines of credit and equipment loans; loans for the construction of commercial projects, and single family residential and multifamily properties; one-to-four family residential real estate loans, such as second mortgage loans; and consumer loans, such as secured and unsecured installment and term loans, home equity loans and lines of credit, and auto loans, as well as loans for personal, family, and household purposes. In addition, the company offers treasury management products, including remote deposit capture, lockbox payment processing, virtual vault, positive pay, ACH origination, wire transfer, investment sweep accounts, and business internet banking services. Further, it provides various other banking services, such as cashiers' checks, direct deposit of payroll and social security checks, night depository, bank-by-mail, automated teller machines, electronic statements, interactive teller machines, online account opening, and mobile wallet payment services. Investar Holding Corporation was founded in 2006 and is headquartered in Baton Rouge, Louisiana.