Reviewing Metro Bancorp (METR) and Live Oak Bancshares (LOB)

Metro Bancorp (NASDAQ: METR) and Live Oak Bancshares (NASDAQ:LOB) are both financials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Analyst Recommendations

This is a breakdown of recent ratings for Metro Bancorp and Live Oak Bancshares, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Metro Bancorp 0 0 0 0 N/A
Live Oak Bancshares 0 1 2 0 2.67

Live Oak Bancshares has a consensus price target of $25.67, suggesting a potential upside of 5.62%. Given Live Oak Bancshares’ higher probable upside, analysts clearly believe Live Oak Bancshares is more favorable than Metro Bancorp.

Dividends

Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Metro Bancorp does not pay a dividend. Live Oak Bancshares pays out 17.1% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Metro Bancorp 16.68% 7.88% 0.75%
Live Oak Bancshares 13.71% 11.50% 1.37%

Earnings & Valuation

This table compares Metro Bancorp and Live Oak Bancshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Metro Bancorp N/A N/A N/A N/A N/A
Live Oak Bancshares $151.53 million 4.81 $21.01 million $0.70 34.71

Live Oak Bancshares has higher revenue and earnings than Metro Bancorp.

Institutional and Insider Ownership

37.5% of Live Oak Bancshares shares are held by institutional investors. 30.1% of Live Oak Bancshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Live Oak Bancshares beats Metro Bancorp on 8 of the 10 factors compared between the two stocks.

About Metro Bancorp

Metro Bancorp, Inc. is a bank holding company. The Company provides full banking services through its subsidiary, Metro Bank (the Bank), which is a state-chartered bank. The Bank offers its lending and depository services from its main store in Lemoyne, Pennsylvania, and its around 33 other full-service stores located in Cumberland, Dauphin, York, Berks, Lancaster and Lebanon Counties, Pennsylvania. The Bank provides retail and commercial banking services for consumers and small and mid-sized companies. The Bank’s lending and investment activities are funded principally by retail deposits gathered through its retail store office network. The Bank provides a range of retail banking services and products, including free personal checking accounts and business checking accounts, regular savings accounts, money market accounts, interest checking accounts, fixed rate certificates of deposit (CDs), individual retirement accounts, club accounts, and debit card services, among others.

About Live Oak Bancshares

Live Oak Bancshares, Inc. is a bank holding company. The Company conducts business operations primarily through its commercial bank subsidiary, Live Oak Banking Company (the Bank). The Bank specializes in providing lending services to small businesses nationwide in targeted industries. The loans originated by the Bank are guaranteed by the small business administration (SBA). The Company’s loan portfolio includes commercial and industrial loans; construction and development loans; commercial real estate, and commercial land. The Company’s investment securities include the United States Government agencies, residential mortgage-backed securities and mutual fund. The Company’s deposits include non-interest-bearing deposits and interest-bearing deposits, such as interest-bearing checking, money market and time deposits.

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