Comparing Ohio Valley Banc (NASDAQ:OVBC) and German American Bancorp (NASDAQ:GABC)

Ohio Valley Banc (NASDAQ:OVBC) and German American Bancorp (NASDAQ:GABC) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, profitability, earnings, institutional ownership and risk.

Insider & Institutional Ownership

22.1% of Ohio Valley Banc shares are owned by institutional investors. Comparatively, 46.9% of German American Bancorp shares are owned by institutional investors. 7.1% of Ohio Valley Banc shares are owned by company insiders. Comparatively, 4.6% of German American Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Ohio Valley Banc pays an annual dividend of $0.92 per share and has a dividend yield of 2.2%. German American Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.8%. Ohio Valley Banc pays out 30.7% of its earnings in the form of a dividend. German American Bancorp pays out 40.6% 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. Ohio Valley Banc has increased its dividend for 3 consecutive years and German American Bancorp has increased its dividend for 13 consecutive years. German American Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Ohio Valley Banc and German American Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ohio Valley Banc	14.97%	8.97%	0.93%
German American Bancorp	22.19%	11.85%	1.49%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Ohio Valley Banc and German American Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ohio Valley Banc	0	0	1	0	3.00
German American Bancorp	0	2	1	0	2.33

German American Bancorp has a consensus price target of $45.50, indicating a potential upside of 11.22%. Given German American Bancorp’s higher probable upside, analysts clearly believe German American Bancorp is more favorable than Ohio Valley Banc.

Earnings and Valuation

This table compares Ohio Valley Banc and German American Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ohio Valley Banc	$88.93 million	2.19	$11.00 million	$3.00	13.81
German American Bancorp	$353.70 million	4.34	$83.81 million	$2.86	14.30

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

Summary

German American Bancorp beats Ohio Valley Banc on 11 of the 15 factors compared between the two stocks.

About Ohio Valley Banc

Ohio Valley Banc Corp. operates as the bank holding company for The Ohio Valley Bank Company that provides commercial and consumer banking products and services. The company operates in two segments, Banking and Consumer Finance. It accepts various deposit products, including checking, savings, time, and money market accounts, as well as individual retirement accounts, demand deposits, NOW accounts, and certificates of deposit. The company also provides various residential real estate loans, including one-to four-family residential mortgages; commercial loans for securing equipment, inventory, stock, commercial real estate, and rental property; and consumer loans secured by automobiles, mobile homes, recreational vehicles, and other personal property, as well as personal loans, unsecured credit card receivables, floor plan and student loans, and construction loans. In addition, it offers safe deposit box, wire transfer, credit card, home equity loans, and Internet banking services; and financial management online services, such as cash management and news updates related to repossession auctions, current rates, and general bank news. Further, the company provides automatic teller machines (ATMs), consumer finance, seasonal tax preparation, commercial property, and various liability insurance services, as well as trust and online-only consumer direct mortgage services. The company owns and operates ATMs, including off-site ATMs. It operates offices in Ohio and West Virginia. The company was founded in 1872 and is based in Gallipolis, Ohio.

About German American Bancorp

German American Bancorp, Inc. operates as a financial holding company for German American Bank that provides retail and commercial banking services. The company operates through three segments: Core Banking, Wealth Management Services, and Insurance Operations. The Core Banking segment accepts deposits from the general public; and originates consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, as well as sells residential mortgage loans in the secondary market. The Wealth Management segment provides trust, investment advisory, brokerage, and retirement planning services. The Insurance Operations segment offers a range of personal and corporate property and casualty insurance products. It also offers checking, saving, and individual retirement accounts; certificates of deposit; wire transfer; credit cards; home equity, mortgages, and small business; treasury management; and online and mobile banking, bill pay, digital wallet, mobile check deposit, credit score and report, money management, and estatements, as well as wealth advisory. German American Bancorp, Inc. was founded in 1910 and is based in Jasper, Indiana.