Critical Review: Oak Ridge Financial Services (OTCMKTS:BKOR) and C&F Financial (NASDAQ:CFFI)

C&F Financial (NASDAQ:CFFI) and Oak Ridge Financial Services (OTCMKTS:BKOR) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, earnings, profitability, risk, analyst recommendations and dividends.

Volatility and Risk

C&F Financial has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500. Comparatively, Oak Ridge Financial Services has a beta of 0.1, suggesting that its stock price is 90% less volatile than the S&P 500.

Institutional & Insider Ownership

37.2% of C&F Financial shares are owned by institutional investors. Comparatively, 4.2% of Oak Ridge Financial Services shares are owned by institutional investors. 6.3% of C&F Financial shares are owned by insiders. Comparatively, 25.6% of Oak Ridge Financial Services shares are owned by 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.

Dividends

C&F Financial pays an annual dividend of $1.84 per share and has a dividend yield of 2.3%. Oak Ridge Financial Services pays an annual dividend of $0.56 per share and has a dividend yield of 1.9%. C&F Financial pays out 22.2% of its earnings in the form of a dividend. Oak Ridge Financial Services pays out 19.2% 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. C&F Financial has increased its dividend for 1 consecutive years. C&F Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares C&F Financial and Oak Ridge Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
C&F Financial	14.43%	11.03%	1.01%
Oak Ridge Financial Services	18.10%	N/A	N/A

Analyst Ratings

This is a breakdown of recent recommendations and price targets for C&F Financial and Oak Ridge Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
C&F Financial	0	1	0	0	2.00
Oak Ridge Financial Services	0	0	0	0	0.00

Valuation & Earnings

This table compares C&F Financial and Oak Ridge Financial Services”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
C&F Financial	$140.84 million	1.83	$26.83 million	$8.28	9.63
Oak Ridge Financial Services	$44.28 million	1.87	$5.67 million	$2.92	10.36

C&F Financial has higher revenue and earnings than Oak Ridge Financial Services. C&F Financial is trading at a lower price-to-earnings ratio than Oak Ridge Financial Services, indicating that it is currently the more affordable of the two stocks.

Summary

C&F Financial beats Oak Ridge Financial Services on 10 of the 15 factors compared between the two stocks.

About C&F Financial

C&F Financial Corp. is a bank holding company, which engages in the provision of banking services to individuals and businesses. It operates through the following segments: Community Banking, Mortgage Banking and Consumer Finance. The Community Banking segment provides checking and savings deposit accounts, business, real estate, development, mortgage, home equity, and installment loans. The Mortgage Banking segment offers ancillary mortgage loan origination services for loan settlement and residential appraisals. The Consumer Finance segment consists of automobile financing through lending programs that are designed to serve customers in the non-prime market who have limited access to traditional automobile financing. The company was founded on March 8, 1994 and is headquartered in Toano, VA.

About Oak Ridge Financial Services

Oak Ridge Financial Services, Inc. operates as a bank holding company for Bank of Oak Ridge that provides various banking products and services for individuals and businesses. It offers checking, savings, and money market accounts; overdrafts; auto, home equity, mortgage, business term, and business SBA loans; business lines of credit; credit cards; and online and mobile banking products and services. The company also provides health savings accounts, identity theft protection, wealth management, cash management, and remote deposit capture services; and auto, home, small business, renters, life, boat and watercraft, classic car, motorcycle, flood, pet, and umbrella insurance products. It operates through a network of branches in Oak Ridge, Greensboro, and Summerfield, North Carolina. The company was founded in 2000 and is based in Oak Ridge, North Carolina.