Live Oak Bancshares (NYSE:LOB) versus Fannie Mae (OTCMKTS:FNMA) Head to Head Analysis

Live Oak Bancshares (NYSE:LOB) and Fannie Mae (OTCMKTS:FNMA) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.

Profitability

This table compares Live Oak Bancshares and Fannie Mae’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Live Oak Bancshares	12.22%	11.56%	0.89%
Fannie Mae	5.16%	-82.92%	0.52%

Risk and Volatility

Live Oak Bancshares has a beta of 1.94, suggesting that its stock price is 94% more volatile than the S&P 500. Comparatively, Fannie Mae has a beta of 1.68, suggesting that its stock price is 68% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Live Oak Bancshares and Fannie Mae, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Live Oak Bancshares	0	4	2	0	2.33
Fannie Mae	1	5	0	0	1.83

Live Oak Bancshares presently has a consensus price target of $41.75, suggesting a potential upside of 21.33%. Fannie Mae has a consensus price target of $7.30, suggesting a potential upside of 52.08%. Given Fannie Mae’s higher probable upside, analysts plainly believe Fannie Mae is more favorable than Live Oak Bancshares.

Institutional and Insider Ownership

64.0% of Live Oak Bancshares shares are held by institutional investors. Comparatively, 0.0% of Fannie Mae shares are held by institutional investors. 22.4% of Live Oak Bancshares shares are held by insiders. Comparatively, 1.0% of Fannie Mae shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Live Oak Bancshares and Fannie Mae”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Live Oak Bancshares	$1.04 billion	1.53	$105.87 million	$2.81	12.25
Fannie Mae	$159.17 billion	0.03	$14.36 billion	$0.22	21.82

Fannie Mae has higher revenue and earnings than Live Oak Bancshares. Live Oak Bancshares is trading at a lower price-to-earnings ratio than Fannie Mae, indicating that it is currently the more affordable of the two stocks.

Summary

Live Oak Bancshares beats Fannie Mae on 10 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 Fannie Mae

Federal National Mortgage Association provides financing solutions for mortgages in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment securitizes and purchases single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these loans; and loans that are insured by Federal Housing Administration, loans guaranteed by the Department of Veterans Affairs and Rural Development Housing and Community Facilities Program of the U.S. Department of Agriculture, manufactured housing mortgage loans, and other mortgage-related securities. The Multifamily segment securitizes multifamily mortgage loans into Fannie Mae mortgage backed securities (MBS); purchases multifamily mortgage loans; and provides credit enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. This segment also issues structured MBS backed by Fannie Mae multifamily MBS; buys and sells multifamily agency mortgage-backed securities; and invests in low-income housing tax credit multifamily projects. Federal National Mortgage Association was founded in 1938 and is based in Washington, the District of Columbia.