Critical Analysis: Ohio Valley Banc (NASDAQ:OVBC) and First Financial Bancorp. (NASDAQ:FFBC)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ohio Valley Banc	13.86%	8.35%	0.85%
First Financial Bancorp.	18.65%	10.44%	1.38%

Risk & Volatility

Ohio Valley Banc has a beta of 0.11, suggesting that its stock price is 89% less volatile than the S&P 500. Comparatively, First Financial Bancorp. has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ohio Valley Banc	$88.93 million	1.82	$11.00 million	$2.68	12.82
First Financial Bancorp.	$840.71 million	2.83	$228.83 million	$2.41	10.32

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

Institutional and Insider Ownership

22.1% of Ohio Valley Banc shares are held by institutional investors. Comparatively, 77.2% of First Financial Bancorp. shares are held by institutional investors. 7.1% of Ohio Valley Banc shares are held by company insiders. Comparatively, 1.1% of First Financial Bancorp. shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Ohio Valley Banc pays an annual dividend of $0.92 per share and has a dividend yield of 2.7%. First Financial Bancorp. pays an annual dividend of $0.96 per share and has a dividend yield of 3.9%. Ohio Valley Banc pays out 34.3% of its earnings in the form of a dividend. First Financial Bancorp. pays out 39.8% 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. Ohio Valley Banc has raised its dividend for 3 consecutive years and First Financial Bancorp. has raised its dividend for 1 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Ohio Valley Banc and First Financial Bancorp., as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ohio Valley Banc	0	0	0	0	0.00
First Financial Bancorp.	0	3	1	0	2.25

First Financial Bancorp. has a consensus price target of $28.75, suggesting a potential upside of 15.65%. Given First Financial Bancorp.’s stronger consensus rating and higher probable upside, analysts clearly believe First Financial Bancorp. is more favorable than Ohio Valley Banc.

Summary

First Financial Bancorp. beats Ohio Valley Banc on 12 of the 17 factors compared between the two stocks.

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.

About First Financial Bancorp.

First Financial Bancorp. operates as the bank holding company for First Financial Bank that provides commercial banking and related services to individuals and businesses in Ohio, Indiana, Kentucky, and Illinois. The company offers checking, savings, and money-market accounts; and accepts various deposit products, such as interest-bearing and non-interest-bearing accounts, time deposits, and cash management services for commercial customers. It also provides real estate loans secured by residential property, such as one to four family residential housing units or commercial property comprising owner-occupied and/or investor income producing real estate consisting of apartments, shopping centers, and office buildings; commercial and industrial loans for various purposes, including inventory, receivables, and equipment, as well as equipment and leasehold improvement financing for franchisees; consumer loans comprising new and used vehicle loans, second mortgages on residential real estate, and unsecured loans; and home equity lines of credit. In addition, the company offers commercial financing to the insurance industry, registered investment advisors, certified public accountants, indirect auto finance companies, and restaurant franchisees. Further, it provides a range of trust and wealth management services; lease and equipment financing services; and currency payments, foreign exchange hedging, and other advisory products. First Financial Bancorp. was founded in 1863 and is headquartered in Cincinnati, Ohio.