Reviewing Live Oak Bancshares (NYSE:LOB) & Mid Penn Bancorp (NASDAQ:MPB)

Mid Penn Bancorp (NASDAQ:MPB) and Live Oak Bancshares (NYSE:LOB) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, profitability and earnings.

Profitability

This table compares Mid Penn Bancorp and Live Oak Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mid Penn Bancorp	17.55%	8.82%	1.13%
Live Oak Bancshares	12.68%	11.77%	0.90%

Valuation & Earnings

This table compares Mid Penn Bancorp and Live Oak Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mid Penn Bancorp	$350.61 million	2.70	$56.25 million	$2.83	13.22
Live Oak Bancshares	$1.04 billion	1.77	$105.87 million	$2.84	13.95

Live Oak Bancshares has higher revenue and earnings than Mid Penn Bancorp. Mid Penn Bancorp is trading at a lower price-to-earnings ratio than Live Oak Bancshares, indicating that it is currently the more affordable of the two stocks.

Dividends

Mid Penn Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 2.5%. Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Mid Penn Bancorp pays out 32.5% of its earnings in the form of a dividend. Live Oak Bancshares pays out 4.2% 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 and Insider Ownership

43.1% of Mid Penn Bancorp shares are owned by institutional investors. Comparatively, 64.0% of Live Oak Bancshares shares are owned by institutional investors. 7.2% of Mid Penn Bancorp shares are owned by company insiders. Comparatively, 22.4% of Live Oak Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Mid Penn Bancorp has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500. Comparatively, Live Oak Bancshares has a beta of 1.86, indicating that its stock price is 86% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Mid Penn Bancorp and Live Oak Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mid Penn Bancorp	0	1	3	0	2.75
Live Oak Bancshares	0	3	3	0	2.50

Mid Penn Bancorp presently has a consensus target price of $39.50, suggesting a potential upside of 5.61%. Live Oak Bancshares has a consensus target price of $46.40, suggesting a potential upside of 17.08%. Given Live Oak Bancshares’ higher possible upside, analysts plainly believe Live Oak Bancshares is more favorable than Mid Penn Bancorp.

Summary

Live Oak Bancshares beats Mid Penn Bancorp on 10 of the 15 factors compared between the two stocks.

About Mid Penn Bancorp

Mid Penn Bancorp, Inc. operates as the bank holding company for Mid Penn Bank that provides commercial banking services to individuals, partnerships, non-profit organizations, and corporations. The company offers various time and demand deposit products, including checking accounts, savings accounts, clubs, money market deposit accounts, certificates of deposit, and individual retirement accounts. It also provides a range of loan products comprising mortgage and home equity loans, secured and unsecured commercial and consumer loans, lines of credit, construction financing, farm loans, community development loans, loans to non-profit entities, and local government loans. In addition, the company offers trust, retail investment, wealth management, and insurance services; and provides online banking, telephone banking, cash management, and automated teller services, as well as safe deposit boxes. The company was founded in 1868 and is headquartered in Harrisburg, Pennsylvania.

About Live Oak Bancshares

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.