Orrstown Financial Services (NASDAQ: ORRF) and First Trust California Municipal High income ETF (NASDAQ:FCAL) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Profitability

This table compares Orrstown Financial Services and First Trust California Municipal High income ETF’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orrstown Financial Services 14.58% 7.15% 0.68%
First Trust California Municipal High income ETF N/A N/A N/A

Dividends

Orrstown Financial Services pays an annual dividend of $0.48 per share and has a dividend yield of 1.9%. First Trust California Municipal High income ETF pays an annual dividend of $0.51 per share and has a dividend yield of 1.0%. Orrstown Financial Services pays out 39.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings for Orrstown Financial Services and First Trust California Municipal High income ETF, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orrstown Financial Services 0 1 1 0 2.50
First Trust California Municipal High income ETF 0 0 0 0 N/A

Orrstown Financial Services presently has a consensus target price of $28.00, indicating a potential upside of 9.59%. Given Orrstown Financial Services’ higher probable upside, equities analysts clearly believe Orrstown Financial Services is more favorable than First Trust California Municipal High income ETF.

Valuation and Earnings

This table compares Orrstown Financial Services and First Trust California Municipal High income ETF’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Orrstown Financial Services $61.70 million 3.46 $6.62 million $1.22 20.94
First Trust California Municipal High income ETF N/A N/A N/A N/A N/A

Orrstown Financial Services has higher revenue and earnings than First Trust California Municipal High income ETF.

Insider & Institutional Ownership

39.6% of Orrstown Financial Services shares are held by institutional investors. 5.4% of Orrstown Financial Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Orrstown Financial Services beats First Trust California Municipal High income ETF on 9 of the 10 factors compared between the two stocks.

Orrstown Financial Services Company Profile

Orrstown Financial Services, Inc. is the bank holding company for Orrstown Bank (the Bank). The Bank is engaged in commercial banking and trust business. The Company operates through Community Banking segment. The Bank’s activities involve accepting demand, time and savings deposits, and granting loans. The Bank grants commercial, residential, consumer and agribusiness loans in its market areas of Cumberland, Franklin, Lancaster and Perry Counties in Pennsylvania and in Washington County, Maryland. The Company’s securities available for sale include debt and equity instruments. Through its trust department, the Bank renders services as trustee, executor, administrator, managing agent, custodian, investment advisor and other fiduciary activities authorized by law under the trade name, Orrstown Financial Advisors (OFA). OFA offers retail brokerage services through a third-party broker or dealer arrangement with Cetera Advisor Networks LLC.

First Trust California Municipal High income ETF Company Profile

First California Financial Group, Inc. is a bank holding company for its wholly owned subsidiary First California Bank (the Bank). The Bank is a full-service commercial bank. The Bank’s operations are primarily located within the areas commonly known as the 101 corridor stretching from the City of Ventura to Calabasas, California, the Moorpark-Simi Valley corridor, the western San Fernando Valley, the Tri-Cities area of Glendale-Burbank-Pasadena, the South Bay, the Inland Empire, north San Diego County, Century City and other parts of Los Angeles, Orange San Luis Obispo and Ventura Counties in Southern California. Its lending products include revolving lines of credit, term loans, commercial real estate loans, construction loans and consumer and home equity loans. In April 8, 2011, the Bank acquired the Electronic Payment Solutions division of Palm Desert National Bank. On February 18, 2011, the Bank acquired substantially all of the operations of San Luis Trust Bank.

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