Reviewing Oak Valley Bancorp (NASDAQ:OVLY) & Columbia Banking System (NASDAQ:COLB)

Oak Valley Bancorp (NASDAQ:OVLY) and Columbia Banking System (NASDAQ:COLB) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Oak Valley Bancorp	24.80%	11.99%	1.20%
Columbia Banking System	19.28%	11.41%	1.30%

Valuation and Earnings

This table compares Oak Valley Bancorp and Columbia Banking System”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oak Valley Bancorp	$95.04 million	2.98	$23.91 million	$2.88	11.68
Columbia Banking System	$3.21 billion	2.71	$550.00 million	$2.51	11.97

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

Dividends

Oak Valley Bancorp pays an annual dividend of $0.75 per share and has a dividend yield of 2.2%. Columbia Banking System pays an annual dividend of $1.48 per share and has a dividend yield of 4.9%. Oak Valley Bancorp pays out 26.0% of its earnings in the form of a dividend. Columbia Banking System pays out 59.0% 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 increased its dividend for 11 consecutive years and Columbia Banking System has increased its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and price targets for Oak Valley Bancorp and Columbia Banking System, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oak Valley Bancorp	0	0	1	0	3.00
Columbia Banking System	0	9	4	1	2.43

Columbia Banking System has a consensus target price of $32.13, indicating a potential upside of 6.91%. Given Columbia Banking System’s higher probable upside, analysts clearly believe Columbia Banking System is more favorable than Oak Valley Bancorp.

Institutional and Insider Ownership

30.9% of Oak Valley Bancorp shares are owned by institutional investors. Comparatively, 92.5% of Columbia Banking System shares are owned by institutional investors. 13.9% of Oak Valley Bancorp shares are owned by insiders. Comparatively, 0.6% of Columbia Banking System shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Oak Valley Bancorp has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500. Comparatively, Columbia Banking System has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500.

Summary

Columbia Banking System beats Oak Valley Bancorp on 10 of the 18 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, 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.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.