Analyzing Lakeland Financial (NASDAQ:LKFN) and Ohio Valley Banc (NASDAQ:OVBC)

Lakeland Financial (NASDAQ:LKFN) and Ohio Valley Banc (NASDAQ:OVBC) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Dividends

Lakeland Financial pays an annual dividend of $2.00 per share and has a dividend yield of 3.1%. Ohio Valley Banc pays an annual dividend of $0.92 per share and has a dividend yield of 2.7%. Lakeland Financial pays out 57.1% of its earnings in the form of a dividend. Ohio Valley Banc pays out 34.3% 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. Lakeland Financial has raised its dividend for 14 consecutive years and Ohio Valley Banc has raised its dividend for 3 consecutive years. Lakeland Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Lakeland Financial and Ohio Valley Banc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lakeland Financial	21.08%	12.71%	1.30%
Ohio Valley Banc	13.86%	8.35%	0.85%

Institutional & Insider Ownership

81.2% of Lakeland Financial shares are held by institutional investors. Comparatively, 22.1% of Ohio Valley Banc shares are held by institutional investors. 3.0% of Lakeland Financial shares are held by insiders. Comparatively, 7.1% of Ohio Valley Banc shares are held 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.

Earnings and Valuation

This table compares Lakeland Financial and Ohio Valley Banc”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lakeland Financial	$257.30 million	6.46	$93.48 million	$3.50	18.58
Ohio Valley Banc	$88.93 million	1.83	$11.00 million	$2.68	12.91

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

Risk and Volatility

Lakeland Financial has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Ohio Valley Banc has a beta of 0.11, suggesting that its share price is 89% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Lakeland Financial and Ohio Valley Banc, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lakeland Financial	0	1	1	0	2.50
Ohio Valley Banc	0	0	0	0	0.00

Lakeland Financial currently has a consensus target price of $68.50, indicating a potential upside of 5.32%. Given Lakeland Financial’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Lakeland Financial is more favorable than Ohio Valley Banc.

Summary

Lakeland Financial beats Ohio Valley Banc on 15 of the 17 factors compared between the two stocks.

About Lakeland Financial

Lakeland Financial Corporation operates as the bank holding company for Lake City Bank that provides various banking products and services in the United States. The company accepts various deposit products, such as noninterest bearing, interest-bearing checking, savings, money market, NOW, and demand deposits. Its loan products include commercial and industrial, commercial real estate and multi-family residential, construction, agri-business and agricultural, consumer 1-4 family mortgage, and other commercial and consumer loans. The company also provides retail and merchant credit card services; corporate treasury management, wealth advisory, and trust services; retail brokerage services, including various financial and investment products, such as annuities and life insurance; and mobile business banking and on-line treasury management services. It serves commercial real estate, manufacturing, agriculture, construction, retail, wholesale, finance and insurance, accommodation and food services, and health care industries. The company was founded in 1872 and is headquartered in Warsaw, Indiana.

About Ohio Valley Banc

Ohio Valley Banc Corp. operates as the bank holding company for The Ohio Valley Bank Company that provides commercial and consumer banking products and services. The company operates in two segments, Banking and Consumer Finance. It accepts various deposit products, including checking, savings, time, and money market accounts, as well as individual retirement accounts, demand deposits, NOW accounts, and certificates of deposit. The company also provides various residential real estate loans, including one-to four-family residential mortgages; commercial loans for securing equipment, inventory, stock, commercial real estate, and rental property; and consumer loans secured by automobiles, mobile homes, recreational vehicles, and other personal property, as well as personal loans, unsecured credit card receivables, floor plan and student loans, and construction loans. In addition, it offers safe deposit box, wire transfer, credit card, home equity loans, and Internet banking services; and financial management online services, such as cash management and news updates related to repossession auctions, current rates, and general bank news. Further, the company provides automatic teller machines (ATMs), consumer finance, seasonal tax preparation, commercial property, and various liability insurance services, as well as trust and online-only consumer direct mortgage services. The company owns and operates ATMs, including off-site ATMs. It operates offices in Ohio and West Virginia. The company was founded in 1872 and is based in Gallipolis, Ohio.