Comparing MidWestOne Financial Group (NASDAQ:MOFG) and Oak Valley Bancorp (NASDAQ:OVLY)

MidWestOne Financial Group (NASDAQ:MOFG) and Oak Valley Bancorp (NASDAQ:OVLY) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Earnings and Valuation

This table compares MidWestOne Financial Group and Oak Valley Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MidWestOne Financial Group	$183.24 million	2.43	$20.86 million	$1.44	19.65
Oak Valley Bancorp	$77.98 million	2.84	$30.85 million	$3.31	8.02

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

Dividends

MidWestOne Financial Group pays an annual dividend of $0.97 per share and has a dividend yield of 3.4%. Oak Valley Bancorp pays an annual dividend of $0.45 per share and has a dividend yield of 1.7%. MidWestOne Financial Group pays out 67.4% of its earnings in the form of a dividend. Oak Valley Bancorp pays out 13.6% 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. MidWestOne Financial Group has raised its dividend for 14 consecutive years and Oak Valley Bancorp has raised its dividend for 10 consecutive years. MidWestOne Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for MidWestOne Financial Group and Oak Valley Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MidWestOne Financial Group	0	3	0	0	2.00
Oak Valley Bancorp	0	0	0	0	N/A

MidWestOne Financial Group currently has a consensus target price of $26.50, suggesting a potential downside of 6.36%. Given MidWestOne Financial Group’s higher probable upside, equities analysts clearly believe MidWestOne Financial Group is more favorable than Oak Valley Bancorp.

Insider & Institutional Ownership

65.4% of MidWestOne Financial Group shares are held by institutional investors. Comparatively, 30.9% of Oak Valley Bancorp shares are held by institutional investors. 2.8% of MidWestOne Financial Group shares are held by insiders. Comparatively, 19.3% of Oak Valley Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MidWestOne Financial Group	9.79%	5.27%	0.42%
Oak Valley Bancorp	28.41%	15.52%	1.36%

Volatility and Risk

MidWestOne Financial Group has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500. Comparatively, Oak Valley Bancorp has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500.

Summary

Oak Valley Bancorp beats MidWestOne Financial Group on 8 of the 15 factors compared between the two stocks.

About MidWestOne Financial Group

MidWestOne Financial Group, Inc. operates as the bank holding company for MidWestOne Bank that provides commercial and retail banking products and services to individuals, businesses, governmental units, and institutional customers. It offers range of deposit products, including noninterest bearing and interest bearing demand deposits, savings, money market, and time deposits accounts. The company also provides commercial, real estate, agricultural, credit card, and consumer loans; and financing arrangements, such as brokered deposits, term debt, subordinated debt, and equity. In addition, it offers trust and investment services comprising administering estates, trusts, and conservatorships; property and farm management, investment advisory, retail securities brokerage, financial planning, and custodial services; and licensed brokers services. Further, the company provides online and mobile banking, debit cards, automated teller machines, and safe deposit boxes. MidWestOne Financial Group, Inc. was founded in 1934 and is headquartered in Iowa City, Iowa.

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.