Financial Analysis: ChoiceOne Financial Services (NASDAQ:COFS) and Ohio Valley Banc (NASDAQ:OVBC)

ChoiceOne Financial Services (NASDAQ:COFS) and Ohio Valley Banc (NASDAQ:OVBC) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares ChoiceOne Financial Services and Ohio Valley Banc”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ChoiceOne Financial Services	$92.44 million	2.76	$26.73 million	$3.26	8.73
Ohio Valley Banc	$61.98 million	2.31	$11.00 million	$2.32	13.09

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

Institutional and Insider Ownership

19.9% of ChoiceOne Financial Services shares are owned by institutional investors. Comparatively, 22.1% of Ohio Valley Banc shares are owned by institutional investors. 7.9% of ChoiceOne Financial Services shares are owned by insiders. Comparatively, 5.3% of Ohio Valley Banc shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares ChoiceOne Financial Services and Ohio Valley Banc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ChoiceOne Financial Services	19.21%	12.44%	1.04%
Ohio Valley Banc	12.37%	7.44%	0.77%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for ChoiceOne Financial Services and Ohio Valley Banc, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ChoiceOne Financial Services	0	0	3	0	3.00
Ohio Valley Banc	0	0	0	0	0.00

ChoiceOne Financial Services presently has a consensus price target of $37.00, suggesting a potential upside of 30.03%. Given ChoiceOne Financial Services’ stronger consensus rating and higher probable upside, research analysts clearly believe ChoiceOne Financial Services is more favorable than Ohio Valley Banc.

Dividends

ChoiceOne Financial Services pays an annual dividend of $1.12 per share and has a dividend yield of 3.9%. Ohio Valley Banc pays an annual dividend of $0.88 per share and has a dividend yield of 2.9%. ChoiceOne Financial Services pays out 34.4% of its earnings in the form of a dividend. Ohio Valley Banc pays out 37.9% 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. ChoiceOne Financial Services has raised its dividend for 13 consecutive years. ChoiceOne Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

ChoiceOne Financial Services has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500. Comparatively, Ohio Valley Banc has a beta of -0.09, indicating that its share price is 109% less volatile than the S&P 500.

Summary

ChoiceOne Financial Services beats Ohio Valley Banc on 15 of the 17 factors compared between the two stocks.

About ChoiceOne Financial Services

ChoiceOne Financial Services, Inc. operates as the bank holding company for ChoiceOne Bank that provides banking services to corporations, partnerships, and individuals in Michigan. The company offers various deposit products, including time, savings, and demand deposits, safe deposit, and automated transaction machine services. It also provides commercial lending products, such as business, industry, agricultural, construction, inventory, and real estate loans; and consumer loans comprising direct and indirect loans to consumers and purchasers of residential and real properties. In addition, the company offers alternative investment products, which include annuities and mutual funds; and sells insurance policies, such as life and health for commercial and consumer clients. Further, it provides trust and wealth management services. ChoiceOne Financial Services, Inc. was founded in 1898 and is headquartered in Sparta, Michigan.

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.