Critical Review: Landmark Bancorp (NASDAQ:LARK) versus Provident Financial (NASDAQ:PROV)

Provident Financial (NASDAQ:PROV) and Landmark Bancorp (NASDAQ:LARK) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Earnings and Valuation

This table compares Provident Financial and Landmark Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Provident Financial	$60.15 million	1.72	$6.26 million	$0.99	16.42
Landmark Bancorp	$95.97 million	1.62	$18.77 million	$3.07	8.34

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

Institutional and Insider Ownership

71.3% of Provident Financial shares are owned by institutional investors. Comparatively, 25.7% of Landmark Bancorp shares are owned by institutional investors. 11.5% of Provident Financial shares are owned by insiders. Comparatively, 12.8% of Landmark Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Provident Financial and Landmark Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Provident Financial	10.97%	5.14%	0.53%
Landmark Bancorp	19.56%	12.61%	1.17%

Analyst Recommendations

This is a summary of current ratings and target prices for Provident Financial and Landmark Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Provident Financial	0	3	0	0	2.00
Landmark Bancorp	0	1	0	0	2.00

Provident Financial presently has a consensus target price of $16.00, suggesting a potential downside of 1.60%. Given Provident Financial’s higher probable upside, analysts clearly believe Provident Financial is more favorable than Landmark Bancorp.

Dividends

Provident Financial pays an annual dividend of $0.56 per share and has a dividend yield of 3.4%. Landmark Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 3.3%. Provident Financial pays out 56.6% of its earnings in the form of a dividend. Landmark Bancorp pays out 27.4% 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. Landmark Bancorp has increased its dividend for 6 consecutive years.

Volatility and Risk

Provident Financial has a beta of 0.29, suggesting that its share price is 71% less volatile than the S&P 500. Comparatively, Landmark Bancorp has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500.

Summary

Landmark Bancorp beats Provident Financial on 10 of the 15 factors compared between the two stocks.

About Provident Financial

Provident Financial Holdings, Inc. operates as the holding company for Provident Savings Bank, F.S.B. that provides community banking services to consumers and small to mid-sized businesses in the Inland Empire region of Southern California. The company's deposit products include checking, savings, and money market accounts, as well as time deposits; and loan portfolio consists of single-family, multi-family, commercial real estate, construction, mortgage, commercial business, and consumer loans. It also offers investment services comprising the sale of investment products, such as annuities and mutual funds; and trustee services for real estate transactions. The company operates through full-service banking offices in Riverside County and San Bernardino County. Provident Financial Holdings, Inc. was founded in 1956 and is headquartered in Riverside, California.

About Landmark Bancorp

Landmark Bancorp, Inc. operates as the financial holding company for Landmark National Bank that provides various financial and banking services to its local communities. It offers non-interest bearing demand, money market, checking, and savings accounts, as well as certificates of deposit. The company also provides one-to-four family residential real estate, construction and land, commercial real estate, commercial, paycheck protection program, municipal, and agriculture loans; and consumer and other loans, such as automobile, boat, and home improvement and home equity loans, as well as insurance, and mobile and online banking services. In addition, the company invests in certain investment and mortgage-related securities. It operates in the eastern, central, southeast, and southwest Kansas. The company was founded in 1885 and is headquartered in Manhattan, Kansas.