Head-To-Head Review: ServisFirst Bancshares (NYSE:SFBS) vs. Live Oak Bancshares (NASDAQ:LOB)

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

Volatility and Risk

ServisFirst Bancshares has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Live Oak Bancshares has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500.

Insider & Institutional Ownership

67.3% of ServisFirst Bancshares shares are owned by institutional investors. Comparatively, 64.0% of Live Oak Bancshares shares are owned by institutional investors. 7.4% of ServisFirst Bancshares shares are owned by insiders. Comparatively, 23.9% of Live Oak Bancshares shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ServisFirst Bancshares	21.25%	14.19%	1.29%
Live Oak Bancshares	11.22%	11.13%	0.88%

Earnings and Valuation

This table compares ServisFirst Bancshares and Live Oak Bancshares’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ServisFirst Bancshares	$843.66 million	4.97	$206.85 million	$3.65	21.06
Live Oak Bancshares	$467.62 million	3.92	$73.90 million	$1.99	20.48

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

Dividends

ServisFirst Bancshares pays an annual dividend of $1.20 per share and has a dividend yield of 1.6%. Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. ServisFirst Bancshares pays out 32.9% of its earnings in the form of a dividend. Live Oak Bancshares pays out 6.0% 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for ServisFirst Bancshares and Live Oak Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServisFirst Bancshares	0	2	0	0	2.00
Live Oak Bancshares	0	2	2	0	2.50

ServisFirst Bancshares presently has a consensus target price of $73.00, suggesting a potential downside of 5.05%. Live Oak Bancshares has a consensus target price of $47.25, suggesting a potential upside of 15.92%. Given Live Oak Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Live Oak Bancshares is more favorable than ServisFirst Bancshares.

Summary

ServisFirst Bancshares beats Live Oak Bancshares on 10 of the 16 factors compared between the two stocks.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.

About Live Oak Bancshares

Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various banking products and services in the United States. It operates through two segments, Banking and Fintech. 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; financing for renewable energy application industry; wealth and investment management services to high-net-worth individuals and families; and investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.