Banco Bradesco (NYSE:BBDO) and Orrstown Financial Services (NASDAQ:ORRF) Critical Survey

Orrstown Financial Services (NASDAQ:ORRF) and Banco Bradesco (NYSE:BBDO) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitability and dividends.

Volatility and Risk

Orrstown Financial Services has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, Banco Bradesco has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Dividends

Orrstown Financial Services pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. Banco Bradesco pays an annual dividend of $0.18 per share and has a dividend yield of 4.7%. Orrstown Financial Services pays out 27.0% of its earnings in the form of a dividend. Banco Bradesco pays out 42.9% 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. Orrstown Financial Services has raised its dividend for 10 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations for Orrstown Financial Services and Banco Bradesco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orrstown Financial Services	0	2	3	0	2.60
Banco Bradesco	0	1	0	0	2.00

Orrstown Financial Services presently has a consensus target price of $44.33, indicating a potential upside of 7.14%. Given Orrstown Financial Services’ stronger consensus rating and higher probable upside, research analysts clearly believe Orrstown Financial Services is more favorable than Banco Bradesco.

Earnings and Valuation

This table compares Orrstown Financial Services and Banco Bradesco”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orrstown Financial Services	$356.05 million	2.29	$80.86 million	$4.45	9.30
Banco Bradesco	$123.82 billion	0.33	$4.24 billion	$0.42	9.07

Banco Bradesco has higher revenue and earnings than Orrstown Financial Services. Banco Bradesco is trading at a lower price-to-earnings ratio than Orrstown Financial Services, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Orrstown Financial Services and Banco Bradesco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orrstown Financial Services	24.00%	14.46%	1.56%
Banco Bradesco	10.20%	14.61%	1.11%

Insider & Institutional Ownership

44.3% of Orrstown Financial Services shares are held by institutional investors. 4.3% of Orrstown Financial Services shares are held by insiders. Comparatively, 0.3% of Banco Bradesco shares are held by 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.

Summary

Orrstown Financial Services beats Banco Bradesco on 13 of the 17 factors compared between the two stocks.

About Orrstown Financial Services

Orrstown Financial Services, Inc. operates as the financial holding company for Orrstown Bank that provides commercial banking and financial advisory services to retail, commercial, non-profit, and government clients in the United States. It accepts various deposits, including checking, savings, time, demand, and money market deposits, as well as certificates of deposit. The company also offers commercial loans, such as commercial real estate, equipment, construction, working capital, and other commercial purpose loans, as well as industrial loans; consumer loans, such as home equity and other consumer loans, as well as home equity lines of credit; residential mortgage loans; acquisition and development loans; municipal loans; and installment and other loans. In addition, it provides renders services as trustee, executor, administrator, guardian, managing agent, custodian, and investment advisor, as well as other fiduciary services under the Orrstown Financial Advisors name; and retail brokerage services through a third-party broker/dealer arrangement. Further, the company offers fiduciary, investment advisory, insurance, and brokerage services. Orrstown Financial Services, Inc. was founded in 1919 and is headquartered in Shippensburg, Pennsylvania.

About Banco Bradesco

Banco Bradesco S.A., together with its subsidiaries, provides various banking products and services to individuals, corporates, and businesses in Brazil and internationally. The company operates through two segments, Banking and Insurance. It provides current, savings, click, and salary accounts; real estate credit, vehicle financing, payroll loans, mortgage loans, microcredit, leasing, and personal and installment credit; overdraft and agribusiness loans; debit and business cards; financial and security services; consortium products; car, personal accident, dental, travel, and life insurance; investment products; pension products; foreign currency exchange services; capitalization bonds; and internet banking services. Banco Bradesco S.A. was founded in 1943 and is headquartered in Osasco, Brazil.