Investors are evaluating the potential of two small-cap finance companies: Bank of South Carolina (NASDAQ: BKSC) and Live Oak Bancshares (NASDAQ: LOB). While both institutions operate within the financial sector, their differing attributes present contrasting investment opportunities. This comparison focuses on several key metrics, including profitability, valuation, dividends, and institutional ownership.
Valuation and Earnings Analysis
The financial health of these two banks varies significantly. Bank of South Carolina generated gross revenue that reflects a stable earnings per share (EPS), while Live Oak Bancshares is positioned for higher growth, boasting a consensus target price of $42.50. This figure suggests a potential upside of 29.25%, indicating that analysts are more optimistic about Live Oak’s future performance compared to Bank of South Carolina.
Institutional ownership serves as another indicator of potential growth. A mere 0.2% of Bank of South Carolina shares are held by institutional investors, whereas a substantial 64.0% of Live Oak Bancshares shares are owned by institutions. This disparity suggests that larger investment entities are more confident in Live Oak’s prospects.
Risk, Dividends, and Profitability
Risk profiles also differ between the two banks. Bank of South Carolina has a beta of 0.38, indicating its stock is 62% less volatile than the S&P 500. In contrast, Live Oak Bancshares presents a significantly higher risk with a beta of 2.05, suggesting its stock is 105% more volatile than the broader market.
In terms of dividends, Bank of South Carolina offers an annual dividend of $0.92 per share, yielding 5.7%. This payout represents 66.7% of its earnings, demonstrating a strong commitment to returning capital to shareholders. Live Oak Bancshares, on the other hand, pays a smaller dividend of $0.12 per share, with a yield of only 0.4% and a payout ratio of 8.1%, indicating that it retains a larger portion of its earnings for growth.
Profitability metrics further underscore the differences. Live Oak Bancshares outperforms Bank of South Carolina in ten of the sixteen factors analyzed, revealing a more robust financial profile.
In summary, while both banks offer appealing features, Live Oak Bancshares appears to have stronger growth potential backed by significant institutional interest. Investors looking for stability may lean towards Bank of South Carolina, especially given its higher dividend yield and lower volatility.
About Bank of South Carolina: Founded in 1986 and based in Charleston, South Carolina, Bank of South Carolina Corporation serves various financial needs in the region, including commercial loans and deposit accounts.
About Live Oak Bancshares: Established in 2008 and headquartered in Wilmington, North Carolina, Live Oak Bancshares operates through multiple banking segments, offering a range of deposit and loan products, as well as investment services.
Investors are encouraged to analyze these factors in light of their own financial goals and risk tolerance when considering investments in these two banks.
