Contrasting Jeffersonville Bancorp (OTCMKTS:JFBC) and Orrstown Financial Services (NASDAQ:ORRF)

Orrstown Financial Services (NASDAQ:ORRF) and Jeffersonville Bancorp (OTCMKTS:JFBC) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, earnings, valuation and dividends.

Earnings & Valuation

This table compares Orrstown Financial Services and Jeffersonville Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orrstown Financial Services	$252.65 million	3.22	$80.86 million	$4.45	9.30
Jeffersonville Bancorp	$34.24 million	3.46	$12.55 million	$3.10	9.03

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

Profitability

This table compares Orrstown Financial Services and Jeffersonville Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orrstown Financial Services	24.00%	14.66%	1.56%
Jeffersonville Bancorp	37.76%	12.84%	1.95%

Volatility & Risk

Orrstown Financial Services has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, Jeffersonville Bancorp has a beta of 0.14, suggesting that its share price is 86% less volatile than the S&P 500.

Dividends

Orrstown Financial Services pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. Jeffersonville Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. Orrstown Financial Services pays out 27.0% of its earnings in the form of a dividend. Jeffersonville Bancorp pays out 25.8% 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. Orrstown Financial Services has increased its dividend for 10 consecutive years. Orrstown Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Orrstown Financial Services and Jeffersonville Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orrstown Financial Services	0	3	3	0	2.50
Jeffersonville Bancorp	0	0	0	0	0.00

Orrstown Financial Services presently has a consensus price target of $41.67, suggesting a potential upside of 0.72%. Given Orrstown Financial Services’ stronger consensus rating and higher probable upside, equities analysts clearly believe Orrstown Financial Services is more favorable than Jeffersonville Bancorp.

Institutional and Insider Ownership

44.3% of Orrstown Financial Services shares are owned by institutional investors. 4.3% of Orrstown Financial Services shares are owned by company insiders. Comparatively, 8.4% of Jeffersonville Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Orrstown Financial Services beats Jeffersonville Bancorp on 12 of the 17 factors compared between the two stocks.

About Orrstown Financial Services

Orrstown Financial Services, Inc. operates as the financial holding company for Orrstown Bank that provides commercial banking and financial advisory services to retail, commercial, non-profit, and government clients in the United States. It accepts various deposits, including checking, savings, time, demand, and money market deposits, as well as certificates of deposit. The company also offers commercial loans, such as commercial real estate, equipment, construction, working capital, and other commercial purpose loans, as well as industrial loans; consumer loans, such as home equity and other consumer loans, as well as home equity lines of credit; residential mortgage loans; acquisition and development loans; municipal loans; and installment and other loans. In addition, it provides renders services as trustee, executor, administrator, guardian, managing agent, custodian, and investment advisor, as well as other fiduciary services under the Orrstown Financial Advisors name; and retail brokerage services through a third-party broker/dealer arrangement. Further, the company offers fiduciary, investment advisory, insurance, and brokerage services. Orrstown Financial Services, Inc. was founded in 1919 and is headquartered in Shippensburg, Pennsylvania.

About Jeffersonville Bancorp

Jeffersonville Bancorp operates as the bank holding company for Jeff Bank that provides community banking services to individuals, small businesses, and local municipal governments primarily in Sullivan County, New York. The company offers various deposit products, such as checking, money market, savings, and NOW, as well as demand and time deposits. It also offers commercial mortgage, farmland, construction, real estate, agricultural, residential mortgage, home equity, consumer, installment, and other consumer loans. The company was founded in 1913 and is based in Jeffersonville, New York.