Reviewing Malaga Financial (OTCMKTS:MLGF) & Oak Valley Bancorp (NASDAQ:OVLY)

Malaga Financial (OTCMKTS:MLGF) and Oak Valley Bancorp (NASDAQ:OVLY) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.

Volatility & Risk

Malaga Financial has a beta of 0.09, meaning that its stock price is 91% less volatile than the S&P 500. Comparatively, Oak Valley Bancorp has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Malaga Financial and Oak Valley Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Malaga Financial	0	0	0	0	0.00
Oak Valley Bancorp	0	0	1	0	3.00

Earnings and Valuation

This table compares Malaga Financial and Oak Valley Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Malaga Financial	N/A	N/A	$22.65 million	$2.30	9.87
Oak Valley Bancorp	$89.45 million	2.83	$24.95 million	$2.85	10.60

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

Profitability

This table compares Malaga Financial and Oak Valley Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Malaga Financial	N/A	N/A	N/A
Oak Valley Bancorp	25.28%	12.56%	1.22%

Dividends

Malaga Financial pays an annual dividend of $1.00 per share and has a dividend yield of 4.4%. Oak Valley Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 2.0%. Malaga Financial pays out 43.5% of its earnings in the form of a dividend. Oak Valley Bancorp pays out 21.1% 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. Oak Valley Bancorp has increased its dividend for 11 consecutive years.

Institutional and Insider Ownership

1.2% of Malaga Financial shares are held by institutional investors. Comparatively, 30.9% of Oak Valley Bancorp shares are held by institutional investors. 18.1% of Oak Valley Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Oak Valley Bancorp beats Malaga Financial on 14 of the 15 factors compared between the two stocks.

About Malaga Financial

Malaga Financial Corporation operates as the holding company for Malaga Bank that provides various community banking products and services to personal and business customers. It offers checking, savings, NOW, and money market accounts, certificates of deposits, business banking, consumer, and demand deposits. The company also provides commercial real estate, single and multi-family residential mortgage, consumer, 14-unit investment property, construction, personal, and business loans; home equity lines of credit; and certificates of deposit. In addition, it offers coupon redemption, direct deposit, overdraft lines of credit, telephone transfers, U.S. savings bond redemption, and wire transfer services; and ATM and VISA debit cards, bank by mail, medallion signature guarantee, night depository, notary, safe deposit boxes, and trust deed note collection services. Further, the company provides online banking services, including bill payer, e-statements, and mobile banking services. The company was incorporated in 2002 and is headquartered in Palos Verdes Estates, California.

About Oak Valley Bancorp

Oak Valley Bancorp operates as the bank holding company for Oak Valley Community Bank that provides a range of commercial banking services to individuals and small to medium-sized businesses in the Central Valley and the Eastern Sierras. The company's deposits products include checking and savings, money market, health savings, and individual retirement accounts, as well as certificates of deposit. It also offers commercial real estate loans, commercial business lending and trade finance, and small business administration lending, as well as consumer loans, including automobile loans, home mortgages, credit lines, and other personal loans. In addition, the company provides online and mobile banking, remote deposit capture, merchant, night depository, extended hours, wire transfer of funds, note collection services, and automated teller machines. The company was incorporated in 1990 and is headquartered in Oakdale, California.