Orrstown Financial Services (NASDAQ:ORRF) vs. Hawthorn Bancshares (NASDAQ:HWBK) Head to Head Analysis

Orrstown Financial Services (NASDAQ:ORRF) and Hawthorn Bancshares (NASDAQ:HWBK) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.

Valuation and Earnings

This table compares Orrstown Financial Services and Hawthorn Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orrstown Financial Services	$356.05 million	2.04	$80.86 million	$4.37	8.46
Hawthorn Bancshares	$80.31 million	3.11	$23.80 million	$3.64	9.96

Orrstown Financial Services has higher revenue and earnings than Hawthorn Bancshares. Orrstown Financial Services is trading at a lower price-to-earnings ratio than Hawthorn Bancshares, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Orrstown Financial Services has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Hawthorn Bancshares has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500.

Profitability

This table compares Orrstown Financial Services and Hawthorn Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orrstown Financial Services	23.58%	14.96%	1.56%
Hawthorn Bancshares	22.14%	15.24%	1.33%

Dividends

Orrstown Financial Services pays an annual dividend of $1.20 per share and has a dividend yield of 3.2%. Hawthorn Bancshares pays an annual dividend of $0.84 per share and has a dividend yield of 2.3%. Orrstown Financial Services pays out 27.5% of its earnings in the form of a dividend. Hawthorn Bancshares pays out 23.1% 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. Orrstown Financial Services has raised its dividend for 10 consecutive years and Hawthorn Bancshares has raised its dividend for 5 consecutive years. Orrstown Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

44.3% of Orrstown Financial Services shares are owned by institutional investors. Comparatively, 30.7% of Hawthorn Bancshares shares are owned by institutional investors. 4.3% of Orrstown Financial Services shares are owned by insiders. Comparatively, 22.9% of Hawthorn Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Orrstown Financial Services and Hawthorn Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orrstown Financial Services	0	1	3	0	2.75
Hawthorn Bancshares	0	1	0	0	2.00

Orrstown Financial Services currently has a consensus price target of $42.00, suggesting a potential upside of 13.64%. Given Orrstown Financial Services’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Orrstown Financial Services is more favorable than Hawthorn Bancshares.

Summary

Orrstown Financial Services beats Hawthorn Bancshares on 12 of the 17 factors compared between the two stocks.

About Orrstown Financial Services

Orrstown Financial Services, Inc. operates as the financial holding company for Orrstown Bank that provides commercial banking and financial advisory services to retail, commercial, non-profit, and government clients in the United States. It accepts various deposits, including checking, savings, time, demand, and money market deposits, as well as certificates of deposit. The company also offers commercial loans, such as commercial real estate, equipment, construction, working capital, and other commercial purpose loans, as well as industrial loans; consumer loans, such as home equity and other consumer loans, as well as home equity lines of credit; residential mortgage loans; acquisition and development loans; municipal loans; and installment and other loans. In addition, it provides renders services as trustee, executor, administrator, guardian, managing agent, custodian, and investment advisor, as well as other fiduciary services under the Orrstown Financial Advisors name; and retail brokerage services through a third-party broker/dealer arrangement. Further, the company offers fiduciary, investment advisory, insurance, and brokerage services. Orrstown Financial Services, Inc. was founded in 1919 and is headquartered in Shippensburg, Pennsylvania.

About Hawthorn Bancshares

Hawthorn Bancshares, Inc. operates as the bank holding company for Hawthorn Bank that provides various banking services in the United States. It accepts checking, savings, money market, individual retirement, and other time deposit accounts, as well as certificates of deposit. The company also offers commercial and industrial, single payment personal, installment, commercial and residential real estate, and consumer loans, as well as equipment, operating, and small business administration loans; and debit and credit cards. In addition, it provides trust services that include estate planning, investment, and asset management services; and cash management, safety deposit box, brokerage, and Internet banking services. Hawthorn Bancshares, Inc. was founded in 1865 and is headquartered in Jefferson City, Missouri.