Head to Head Contrast: Hilltop (NYSE:HTH) & Oak Valley Bancorp (NASDAQ:OVLY)

Oak Valley Bancorp (NASDAQ:OVLY) and Hilltop (NYSE:HTH) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, institutional ownership, valuation, dividends and analyst recommendations.

Dividends

Oak Valley Bancorp pays an annual dividend of $0.45 per share and has a dividend yield of 1.9%. Hilltop pays an annual dividend of $0.68 per share and has a dividend yield of 2.3%. Oak Valley Bancorp pays out 12.0% of its earnings in the form of a dividend. Hilltop pays out 40.2% 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. Oak Valley Bancorp has raised its dividend for 10 consecutive years and Hilltop has raised its dividend for 7 consecutive years.

Insider and Institutional Ownership

30.9% of Oak Valley Bancorp shares are held by institutional investors. Comparatively, 57.1% of Hilltop shares are held by institutional investors. 19.6% of Oak Valley Bancorp shares are held by company insiders. Comparatively, 28.9% of Hilltop shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Oak Valley Bancorp and Hilltop’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oak Valley Bancorp	$87.30 million	2.20	$30.85 million	$3.74	6.20
Hilltop	$1.57 billion	1.23	$109.65 million	$1.69	17.47

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

Analyst Ratings

This is a breakdown of recent ratings for Oak Valley Bancorp and Hilltop, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oak Valley Bancorp	0	0	0	0	N/A
Hilltop	0	2	0	0	2.00

Hilltop has a consensus price target of $32.00, suggesting a potential upside of 8.40%. Given Hilltop’s higher probable upside, analysts plainly believe Hilltop is more favorable than Oak Valley Bancorp.

Risk & Volatility

Oak Valley Bancorp has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, Hilltop has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Profitability

This table compares Oak Valley Bancorp and Hilltop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oak Valley Bancorp	35.34%	20.92%	1.65%
Hilltop	7.00%	5.20%	0.65%

Summary

Hilltop beats Oak Valley Bancorp on 8 of the 15 factors compared between the two stocks.

About Oak Valley Bancorp

Oak Valley Bancorp operates as the bank holding company for Oak Valley Community Bank that provides a range of commercial banking services to individuals and small to medium-sized businesses in the Central Valley and the Eastern Sierras. The company's deposits products include checking and savings, money market, health savings, and individual retirement accounts, as well as certificates of deposit. It also offers commercial real estate loans, commercial business lending and trade finance, and small business administration lending, as well as consumer loans that include automobile loans, home mortgages, credit lines and other personal loans. In addition, the company provides online and mobile banking, remote deposit capture, merchant, night depository, extended hours, wire transfer of funds, and note collection services, as well as automated teller machines. The company was incorporated in 1990 and is headquartered in Oakdale, California.

About Hilltop

Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.