Live Oak Bancshares (NASDAQ:LOB – Get Free Report) and Southside Bancshares (NASDAQ:SBSI – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, dividends, earnings and valuation.
Dividends
Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Southside Bancshares pays an annual dividend of $1.44 per share and has a dividend yield of 4.8%. Live Oak Bancshares pays out 9.8% of its earnings in the form of a dividend. Southside Bancshares pays out 51.1% 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. Southside Bancshares has raised its dividend for 30 consecutive years. Southside Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Live Oak Bancshares and Southside Bancshares, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Live Oak Bancshares | 0 | 2 | 2 | 0 | 2.50 |
| Southside Bancshares | 0 | 3 | 0 | 0 | 2.00 |
Risk and Volatility
Live Oak Bancshares has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500. Comparatively, Southside Bancshares has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.
Profitability
This table compares Live Oak Bancshares and Southside Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Live Oak Bancshares | 7.10% | 6.88% | 0.55% |
| Southside Bancshares | 19.40% | 11.10% | 1.06% |
Earnings & Valuation
This table compares Live Oak Bancshares and Southside Bancshares”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Live Oak Bancshares | $516.93 million | 3.28 | $77.47 million | $1.22 | 30.38 |
| Southside Bancshares | $260.02 million | 3.49 | $88.49 million | $2.82 | 10.69 |
Southside Bancshares has lower revenue, but higher earnings than Live Oak Bancshares. Southside Bancshares is trading at a lower price-to-earnings ratio than Live Oak Bancshares, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
64.0% of Live Oak Bancshares shares are owned by institutional investors. Comparatively, 55.7% of Southside Bancshares shares are owned by institutional investors. 23.4% of Live Oak Bancshares shares are owned by company insiders. Comparatively, 6.0% of Southside Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
Live Oak Bancshares beats Southside Bancshares on 9 of the 17 factors compared between the two stocks.
About Live Oak Bancshares
Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various banking products and services in the United States. It operates through two segments, Banking and Fintech. The company accepts various deposit products, including noninterest-bearing demand, as well as interest-bearing checking, money market, savings, and time deposits. It also offers commercial and industrial loans; construction and development loans; owner occupied and non-owner occupied collateral commercial real estate loans; and commercial land loans. In addition, the company provides settlement, accounting, and securitization services for government guaranteed loans; financing for renewable energy application industry; wealth and investment management services to high-net-worth individuals and families; and investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.
About Southside Bancshares
Southside Bancshares, Inc. operates as the bank holding company for Southside Bank that provides a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations. Its deposit products include savings, money market, and interest and noninterest bearing checking accounts, as well as certificates of deposits. The company’s loan portfolio comprises consumer loans that include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other consumer related loans; commercial loans, such as short-term working capital loans for inventory and accounts receivable, short and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans; and construction loans for 1-4 family residential and commercial real estate. It also offers wealth management and trust services consisting of investment management, administration of irrevocable, revocable, and testamentary trusts, estate administration, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. In addition, the company provides retirement and employee benefit accounts, including plans and profit sharing plans; and telephone, internet, and mobile banking services. The company offers various banking services through branches, drive-thru facilities, automated teller machines, and interactive teller machines. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.
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