Financial Analysis: Orrstown Financial Services (NASDAQ:ORRF) vs. Mission Valley Bancorp (OTCMKTS:MVLY)

Orrstown Financial Services (NASDAQ:ORRF) and Mission Valley Bancorp (OTCMKTS:MVLY) 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, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.

Dividends

Orrstown Financial Services pays an annual dividend of $0.92 per share and has a dividend yield of 2.5%. Mission Valley Bancorp pays an annual dividend of $0.15 per share and has a dividend yield of 0.9%. Orrstown Financial Services pays out 49.5% of its earnings in the form of a dividend. Mission Valley Bancorp pays out 10.3% 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.

Volatility and Risk

Orrstown Financial Services has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, Mission Valley Bancorp has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.

Institutional and Insider Ownership

44.3% of Orrstown Financial Services shares are owned by institutional investors. Comparatively, 5.7% of Mission Valley Bancorp shares are owned by institutional investors. 5.3% of Orrstown Financial Services shares are owned by company 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.

Profitability

This table compares Orrstown Financial Services and Mission Valley Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orrstown Financial Services	6.63%	14.41%	1.29%
Mission Valley Bancorp	N/A	N/A	N/A

Analyst Ratings

This is a summary of current recommendations for Orrstown Financial Services and Mission Valley Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orrstown Financial Services	0	1	2	0	2.67
Mission Valley Bancorp	0	0	0	0	0.00

Orrstown Financial Services currently has a consensus target price of $35.33, suggesting a potential downside of 3.49%. Given Orrstown Financial Services’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Orrstown Financial Services is more favorable than Mission Valley Bancorp.

Valuation and Earnings

This table compares Orrstown Financial Services and Mission Valley Bancorp”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	$161.57 million	4.39	$35.66 million	$1.86	19.68
Mission Valley Bancorp	N/A	N/A	$7.40 million	$1.46	11.64

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

Summary

Orrstown Financial Services beats Mission Valley Bancorp on 14 of the 15 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 Mission Valley Bancorp

Mission Valley Bancorp operates as the bank holding company for Mission Valley Bank and Mission SBA Loan Servicing LLC that provides various banking products and services to individuals and corporate customers. The company's deposit products include non-interest-bearing and interest-bearing demand deposits, savings, and time deposits; and certificates of deposit. It also offers accounts receivable loans, advanced restaurant financing loans, commercial loans, real estate loans, small business administration loans, and term loans; consumer loans; and overdraft facilities; as well as credit and debit cards. In addition, the company provides lending services, such as underwriting, processing, closing, servicing, and referral/replacement services to other financial institutions. Mission Valley Bancorp was founded in 2001 and is headquartered in Sun Valley, California.