Live Oak Bancshares (NYSE:LOB – Get Free Report) and Mechanics Bancorp (NASDAQ:MCHB – Get Free Report) are both small-cap financial services 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.
Valuation and Earnings
This table compares Live Oak Bancshares and Mechanics Bancorp”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Live Oak Bancshares | $533.05 million | 2.74 | $77.47 million | $1.49 | 21.41 |
| Mechanics Bancorp | $586.19 million | 0.43 | -$144.34 million | ($6.76) | -1.95 |
Analyst Recommendations
This is a summary of recent recommendations and price targets for Live Oak Bancshares and Mechanics Bancorp, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Live Oak Bancshares | 0 | 2 | 0 | 1 | 2.67 |
| Mechanics Bancorp | 0 | 1 | 0 | 0 | 2.00 |
Mechanics Bancorp has a consensus price target of $14.50, indicating a potential upside of 10.10%. Given Mechanics Bancorp’s higher possible upside, analysts plainly believe Mechanics Bancorp is more favorable than Live Oak Bancshares.
Profitability
This table compares Live Oak Bancshares and Mechanics Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Live Oak Bancshares | 6.94% | 6.73% | 0.52% |
| Mechanics Bancorp | -42.54% | -3.92% | -0.21% |
Institutional and Insider Ownership
64.0% of Live Oak Bancshares shares are owned by institutional investors. Comparatively, 74.7% of Mechanics Bancorp shares are owned by institutional investors. 23.4% of Live Oak Bancshares shares are owned by company insiders. Comparatively, 4.6% of Mechanics Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Risk and Volatility
Live Oak Bancshares has a beta of 1.98, suggesting that its share price is 98% more volatile than the S&P 500. Comparatively, Mechanics Bancorp has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500.
Summary
Live Oak Bancshares beats Mechanics Bancorp on 11 of the 14 factors compared between the two stocks.
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.
About Mechanics Bancorp
HomeStreet, Inc. operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services primarily in the Western United States. The company offers personal and business checking, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit; credit cards; insurance; and treasury management products and services. Its loan products include commercial business and agriculture loans, single family residential mortgages, consumer loans, commercial loans secured by residential and commercial real estate, and construction loans for residential and commercial real estate development, as well as consumer installment loans and permanent loans on commercial real estate and single-family residences. In addition, the company offers its products and services through bank branches, loan production offices, and ATMs, as well as through online, mobile, and telephone banking. As of December 31, 2021, it operated 60 full-service bank branches located in Washington state, Northern and Southern California, the Portland, Oregon, and Hawaii; and five primary stand-alone commercial lending centers in Central Washington, Oregon, Southern California, Idaho, and Utah. HomeStreet, Inc. serves small and medium sized businesses, real estate investors, professional firms, and individuals. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was incorporated in 1921 and is headquartered in Seattle, Washington.
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