Isabella Bank (OTCMKTS:ISBA) and Live Oak Bancshares (NASDAQ:LOB) Head-To-Head Comparison

Isabella Bank (OTCMKTS:ISBA) and Live Oak Bancshares (NASDAQ:LOB) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Dividends

Isabella Bank pays an annual dividend of $1.12 per share and has a dividend yield of 3.5%. Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Isabella Bank pays out 51.1% of its earnings in the form of a dividend. Live Oak Bancshares pays out 9.8% 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.

Profitability

This table compares Isabella Bank and Live Oak Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Isabella Bank	13.28%	7.34%	0.73%
Live Oak Bancshares	7.10%	6.88%	0.55%

Institutional and Insider Ownership

64.0% of Live Oak Bancshares shares are owned by institutional investors. 9.7% of Isabella Bank shares are owned by company insiders. Comparatively, 23.4% of Live Oak Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Isabella Bank has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500. Comparatively, Live Oak Bancshares has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Isabella Bank and Live Oak Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Isabella Bank	0	1	0	0	2.00
Live Oak Bancshares	0	1	2	0	2.67

Isabella Bank presently has a consensus target price of $34.00, suggesting a potential upside of 5.92%. Live Oak Bancshares has a consensus target price of $44.33, suggesting a potential upside of 15.48%. Given Live Oak Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Live Oak Bancshares is more favorable than Isabella Bank.

Valuation & Earnings

This table compares Isabella Bank and Live Oak Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Isabella Bank	$70.49 million	3.35	$13.89 million	$2.19	14.66
Live Oak Bancshares	$516.93 million	3.40	$77.47 million	$1.22	31.47

Live Oak Bancshares has higher revenue and earnings than Isabella Bank. Isabella Bank is trading at a lower price-to-earnings ratio than Live Oak Bancshares, indicating that it is currently the more affordable of the two stocks.

Summary

Live Oak Bancshares beats Isabella Bank on 11 of the 16 factors compared between the two stocks.

About Isabella Bank

Isabella Bank Corporation operates as the bank holding company for Isabella Bank that provides various banking products and services to businesses, institutions, and individuals and their families. Its deposit products include checking accounts, savings accounts, certificates of deposit, direct deposits, and money market accounts. The company's loan portfolio comprises commercial, agricultural, and residential real estate loans, as well as consumer loans, including secured and unsecured personal loans. It also offers cash management, mobile and internet banking, electronic bill pay, automated teller machines, trust and investment, estate planning, and safe deposit box rental services; and insurance products. The company operated banking offices in Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw counties. Isabella Bank Corporation was founded in 1903 and is headquartered in Mount Pleasant, Michigan.

About Live Oak Bancshares

Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various banking products and services in the United States. It operates through two segments, Banking and Fintech. The company accepts various deposit products, including noninterest-bearing demand, as well as interest-bearing checking, money market, savings, and time deposits. It also offers commercial and industrial loans; construction and development loans; owner occupied and non-owner occupied collateral commercial real estate loans; and commercial land loans. In addition, the company provides settlement, accounting, and securitization services for government guaranteed loans; financing for renewable energy application industry; wealth and investment management services to high-net-worth individuals and families; and investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.