Reviewing BEO Bancorp (OTCMKTS:BEOB) & Five Star Bancorp (NASDAQ:FSBC)

BEO Bancorp (OTCMKTS:BEOB) and Five Star Bancorp (NASDAQ:FSBC) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Analyst Recommendations

This is a summary of current ratings and price targets for BEO Bancorp and Five Star Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BEO Bancorp	0	0	0	0	0.00
Five Star Bancorp	0	2	5	0	2.71

Five Star Bancorp has a consensus price target of $40.00, indicating a potential downside of 1.38%. Given Five Star Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Five Star Bancorp is more favorable than BEO Bancorp.

Risk & Volatility

BEO Bancorp has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500. Comparatively, Five Star Bancorp has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Earnings and Valuation

This table compares BEO Bancorp and Five Star Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BEO Bancorp	$59.32 million	2.24	$16.19 million	$13.26	8.28
Five Star Bancorp	$255.47 million	3.39	$61.61 million	$2.90	13.99

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

Profitability

This table compares BEO Bancorp and Five Star Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BEO Bancorp	N/A	16.83%	1.69%
Five Star Bancorp	24.11%	14.49%	1.36%

Dividends

BEO Bancorp pays an annual dividend of $2.00 per share and has a dividend yield of 1.8%. Five Star Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.5%. BEO Bancorp pays out 15.1% of its earnings in the form of a dividend. Five Star Bancorp pays out 34.5% 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.

Institutional & Insider Ownership

46.9% of Five Star Bancorp shares are held by institutional investors. 21.8% of Five Star Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Five Star Bancorp beats BEO Bancorp on 12 of the 16 factors compared between the two stocks.

About BEO Bancorp

BEO Bancorp operates as the bank holding company for Bank of Eastern Oregon that provides commercial and consumer financing, banking and mortgage lending, and other services in Northeastern Oregon and Southeastern Washington. The company offers checking, money market, time deposits, and savings accounts; and certificates of deposit. It also provides commercial, agricultural, real estate, installment, credit card, mortgage, term, home, construction, farm, and refinancing loans; lines of credit; home enhancement loan programs; Internet banking and bill payment services; business sweep and banking services; and automated teller machines and safe deposit facilities, as well as originates and sells mortgage loans into the secondary market. The company was founded in 1945 and is based in Heppner, Oregon.

About Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.