Financial Contrast: Prosperity Bancshares (NYSE:PB) versus Oak Valley Bancorp (NASDAQ:OVLY)

Prosperity Bancshares (NYSE:PB) and Oak Valley Bancorp (NASDAQ:OVLY) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, earnings, valuation and risk.

Valuation & Earnings

This table compares Prosperity Bancshares and Oak Valley Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prosperity Bancshares	$1.17 billion	5.66	$479.39 million	$5.25	13.29
Oak Valley Bancorp	$77.25 million	2.78	$24.95 million	$2.97	8.62

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

Risk & Volatility

Prosperity Bancshares has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Oak Valley Bancorp has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Prosperity Bancshares	26.79%	6.64%	1.22%
Oak Valley Bancorp	28.03%	14.28%	1.35%

Dividends

Prosperity Bancshares pays an annual dividend of $2.32 per share and has a dividend yield of 3.3%. Oak Valley Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 2.3%. Prosperity Bancshares pays out 44.2% of its earnings in the form of a dividend. Oak Valley Bancorp pays out 20.2% 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. Prosperity Bancshares has increased its dividend for 27 consecutive years and Oak Valley Bancorp has increased its dividend for 11 consecutive years. Prosperity Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

80.7% of Prosperity Bancshares shares are held by institutional investors. Comparatively, 30.9% of Oak Valley Bancorp shares are held by institutional investors. 4.2% of Prosperity Bancshares shares are held by company insiders. Comparatively, 18.1% of Oak Valley Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Prosperity Bancshares and Oak Valley Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prosperity Bancshares	0	6	10	0	2.63
Oak Valley Bancorp	0	0	0	0	0.00

Prosperity Bancshares presently has a consensus price target of $83.80, indicating a potential upside of 20.14%. Given Prosperity Bancshares’ stronger consensus rating and higher probable upside, equities analysts clearly believe Prosperity Bancshares is more favorable than Oak Valley Bancorp.

Summary

Prosperity Bancshares beats Oak Valley Bancorp on 12 of the 17 factors compared between the two stocks.

About Prosperity Bancshares

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; term loans and lines of credit; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. The company was incorporated in 1983 and is headquartered in Houston, Texas.

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, including 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, note collection services, and automated teller machines. The company was incorporated in 1990 and is headquartered in Oakdale, California.