Financial Analysis: Live Oak Bancshares (LOB) vs. Its Peers

Live Oak Bancshares (NYSE:LOB) is one of 20 publicly-traded companies in the “State Commercial Banks – Fed Reserve System” industry, but how does it compare to its peers? We will compare Live Oak Bancshares to related businesses based on the strength of its risk, valuation, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Dividends

Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Live Oak Bancshares pays out 8.1% of its earnings in the form of a dividend. As a group, “State Commercial Banks – Fed Reserve System” companies pay a dividend yield of 2.3% and pay out 67.3% of their earnings in the form of a dividend.

Volatility & Risk

Live Oak Bancshares has a beta of 2.02, suggesting that its share price is 102% more volatile than the S&P 500. Comparatively, Live Oak Bancshares’ peers have a beta of 1.01, suggesting that their average share price is 1% more volatile than the S&P 500.

Valuation and Earnings

This table compares Live Oak Bancshares and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Live Oak Bancshares	$936.15 million	$77.47 million	24.61
Live Oak Bancshares Competitors	$723.51 million	$95.99 million	39.72

Live Oak Bancshares has higher revenue, but lower earnings than its peers. Live Oak Bancshares is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Live Oak Bancshares and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Live Oak Bancshares	0	2	0	1	2.67
Live Oak Bancshares Competitors	29	167	197	19	2.50

As a group, “State Commercial Banks – Fed Reserve System” companies have a potential upside of 5.58%. Given Live Oak Bancshares’ peers higher possible upside, analysts clearly believe Live Oak Bancshares has less favorable growth aspects than its peers.

Profitability

This table compares Live Oak Bancshares and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Live Oak Bancshares	6.94%	6.61%	0.51%
Live Oak Bancshares Competitors	7.23%	6.94%	0.79%

Insider and Institutional Ownership

64.0% of Live Oak Bancshares shares are held by institutional investors. Comparatively, 72.2% of shares of all “State Commercial Banks – Fed Reserve System” companies are held by institutional investors. 23.4% of Live Oak Bancshares shares are held by company insiders. Comparatively, 6.7% of shares of all “State Commercial Banks – Fed Reserve System” companies are held by company 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

Live Oak Bancshares peers beat Live Oak Bancshares on 9 of the 15 factors compared.

Live Oak Bancshares Company Profile

Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various commercial banking products and services to individuals, small businesses, and professionals in North Carolina, the United States. 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; wealth and investment management services to high-net-worth individuals and families; investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies; and an on-site restaurant location to company employees and business visitors. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.