Comparing Eagle Financial Services and Live Oak Bancshares

Eagle Financial Services (OTCMKTS:EFSI) and Live Oak Bancshares (NASDAQ:LOB) are two small-cap financial institutions vying for investor attention. Both companies offer distinct services and operate in various markets. This article evaluates their performance in terms of profitability, risk, dividends, and overall market presence, providing insights for potential investors.

Analyst Recommendations and Market Perception

A recent report from MarketBeat highlights the contrasting outlooks for Eagle Financial Services and Live Oak Bancshares. Analysts have issued no sell, hold, or buy ratings for Eagle Financial Services, resulting in a rating score of **0.00**. In contrast, Live Oak Bancshares enjoys a more favorable consensus with **two buy and two hold ratings**, leading to a rating score of **2.50**. The consensus target price for Live Oak Bancshares stands at **$43.75**, indicating a potential upside of **19.93%**. This suggests that analysts favor Live Oak Bancshares over Eagle Financial Services, reflecting a stronger market position.

Dividend Policies and Payout Ratios

Eagle Financial Services offers an annual dividend of **$1.24** per share, translating to a **3.2%** yield. The company retains **57.4%** of its earnings for dividend payments, demonstrating a robust capacity to sustain payouts. Conversely, Live Oak Bancshares provides a smaller dividend of **$0.12** per share, with a yield of **0.3%** and a payout ratio of **9.8%**. While both companies maintain healthy payout ratios, Eagle Financial Services stands out with a significantly higher dividend yield.

Evaluating dividend policies offers insights into each company’s financial health and commitment to returning value to shareholders.

Risk Assessment and Ownership Structure

When assessing volatility, Eagle Financial Services has a beta of **0.29**, indicating that its share price is **71%** less volatile than the S&P 500. In contrast, Live Oak Bancshares has a beta of **1.75**, meaning its shares are **75%** more volatile than the broader market. This difference in volatility should guide investors considering their risk tolerance.

In terms of ownership, institutional investors hold **0.3%** of Eagle Financial Services, while a significant **64.0%** of Live Oak Bancshares shares are owned by institutional investors. Insider ownership also favors Live Oak Bancshares, with **23.4%** of shares held by insiders compared to **8.7%** for Eagle Financial Services. High institutional ownership often signals confidence in a company’s future performance.

Financial Performance and Valuation

A comparison of key financial indicators shows Live Oak Bancshares outperforming Eagle Financial Services in several areas. Live Oak Bancshares reported **$516.93 million** in revenue, a stark contrast to Eagle Financial Services’ **$59.17 million**. The price-to-earnings (P/E) ratio for Eagle Financial Services is **18.19**, indicating a more affordable valuation compared to Live Oak Bancshares’ P/E ratio of **29.90**.

Examining profitability metrics, Eagle Financial Services boasts a net margin of **13.59%**, while Live Oak Bancshares has a margin of **7.10%**. Additionally, Eagle Financial Services shows a return on equity of **10.92%**, outperforming Live Oak’s **6.88%**. These metrics highlight the distinct financial profiles of each company, with Eagle Financial Services demonstrating stronger profitability ratios.

Company Profiles

Eagle Financial Services, founded in **1881**, operates as the bank holding company for the Bank of Clarke. It provides a range of retail and commercial banking products in Virginia’s Shenandoah Valley and parts of Maryland. Its services span community banking, marine lending, and wealth management, with full-service branches and loan production offices strategically located in Virginia communities such as Berryville and Winchester.

Live Oak Bancshares, established in **2008**, serves as the holding company for Live Oak Banking Company. Headquartered in Wilmington, North Carolina, it offers a broad spectrum of banking products and services nationwide. The company specializes in both traditional banking and fintech solutions, including commercial loans and investment management services targeting high-net-worth individuals.

Conclusion

Overall, the analysis reveals that Live Oak Bancshares holds a stronger position in multiple key financial metrics compared to Eagle Financial Services. With a higher analyst rating, greater revenue, and significant institutional backing, it appears to be the more appealing investment option. However, Eagle Financial Services showcases commendable profitability and a robust dividend policy, making it a viable consideration for investors seeking different financial attributes.