Contrasting Anchor Bancorp (ANCB) and Investar (ISTR)

Anchor Bancorp (NASDAQ: ANCB) and Investar (NASDAQ:ISTR) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.

Dividends

Investar pays an annual dividend of $0.13 per share and has a dividend yield of 0.5%. Anchor Bancorp does not pay a dividend. Investar pays out 13.3% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Anchor Bancorp and Investar’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Anchor Bancorp $24.54 million 2.52 $2.35 million $1.16 21.42
Investar $48.62 million 4.25 $7.88 million $0.98 24.18

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

Analyst Ratings

This is a summary of current ratings and target prices for Anchor Bancorp and Investar, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Anchor Bancorp 0 0 0 0 N/A
Investar 0 1 2 0 2.67

Investar has a consensus price target of $27.00, indicating a potential upside of 13.92%. Given Investar’s higher probable upside, analysts clearly believe Investar is more favorable than Anchor Bancorp.

Insider & Institutional Ownership

45.6% of Anchor Bancorp shares are held by institutional investors. Comparatively, 61.6% of Investar shares are held by institutional investors. 5.6% of Anchor Bancorp shares are held by insiders. Comparatively, 8.8% of Investar shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Anchor Bancorp and Investar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Anchor Bancorp 11.28% 4.31% 0.62%
Investar 14.88% 5.88% 0.66%

Risk and Volatility

Anchor Bancorp has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Investar has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500.

Summary

Investar beats Anchor Bancorp on 12 of the 15 factors compared between the two stocks.

Anchor Bancorp Company Profile

Anchor Bancorp is the bank holding company of Anchor Bank (the Bank). The Bank is a community-based savings bank. As of June 30, 2016, the Bank primarily served Western Washington through its 10 full-service banking offices (including a Wal-Mart in-store location) located within Grays Harbor, Thurston, Lewis, Pierce and Mason counties, and a loan production office located in King County, Washington. It is in the business of attracting deposits from the public and utilizing those deposits to originate loans. The Bank offers a range of loan products. The Bank’s operations include commercial banking services, such as lending activities, deposit products and other cash management services. The Bank offers commercial real estate loans and multi-family loans primarily in Western Washington. The Bank offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts and certificates of deposit with a range of rates.

Investar Company Profile

Investar Holding Corporation is financial holding company that conducts its operations through, Investar Bank (the Bank), which is a commercial bank. The Company offers a range of commercial and retail lending products throughout its market areas, including business loans to small to medium-sized businesses, as well as loans to individuals. It serves its primary markets of Baton Rouge, New Orleans, Hammond and Lafayette, Louisiana, and their surrounding metropolitan areas from its office located in Baton Rouge and from approximately 10 additional service branches. The Bank’s other banking services include cashiers’ checks, direct deposit of payroll and Social Security checks, night depository, bank-by-mail, automated teller machines with deposit automation and debit cards. The Company’s business lending products include owner-occupied commercial real estate loans, construction loans, and commercial and industrial loans, such as term loans, equipment financing and lines of credit.

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