Live Oak Bancshares (NYSE:LOB – Get Free Report) and Mechanics Bancorp (NASDAQ:MCHB – Get Free Report) are both small-cap financial services companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, valuation, earnings and profitability.
Volatility & Risk
Live Oak Bancshares has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500. Comparatively, Mechanics Bancorp has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and price targets for Live Oak Bancshares and Mechanics Bancorp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Live Oak Bancshares | 0 | 2 | 0 | 1 | 2.67 |
| Mechanics Bancorp | 0 | 1 | 0 | 0 | 2.00 |
Earnings and Valuation
This table compares Live Oak Bancshares and Mechanics Bancorp”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Live Oak Bancshares | $533.05 million | 2.68 | $77.47 million | $1.49 | 20.97 |
| Mechanics Bancorp | $586.19 million | 0.42 | -$144.34 million | ($6.76) | -1.95 |
Live Oak Bancshares has higher earnings, but lower revenue than Mechanics Bancorp. Mechanics Bancorp is trading at a lower price-to-earnings ratio than Live Oak Bancshares, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Live Oak Bancshares and Mechanics Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Live Oak Bancshares | 6.94% | 6.73% | 0.52% |
| Mechanics Bancorp | -42.54% | -3.92% | -0.21% |
Insider and Institutional Ownership
64.0% of Live Oak Bancshares shares are held by institutional investors. Comparatively, 74.7% of Mechanics Bancorp shares are held by institutional investors. 23.4% of Live Oak Bancshares shares are held by insiders. Comparatively, 4.6% of Mechanics Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Summary
Live Oak Bancshares beats Mechanics Bancorp on 11 of the 14 factors compared between the two stocks.
About Live Oak Bancshares
Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various commercial banking products and services to individuals, small businesses, and professionals in North Carolina, the United States. 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; wealth and investment management services to high-net-worth individuals and families; investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies; and an on-site restaurant location to company employees and business visitors. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.
About Mechanics Bancorp
HomeStreet, Inc. operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services primarily in the Western United States. The company offers personal and business checking, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit; credit cards; insurance; and treasury management products and services. Its loan products include commercial business and agriculture loans, single family residential mortgages, consumer loans, commercial loans secured by residential and commercial real estate, and construction loans for residential and commercial real estate development, as well as consumer installment loans and permanent loans on commercial real estate and single-family residences. In addition, the company offers its products and services through bank branches, loan production offices, and ATMs, as well as through online, mobile, and telephone banking. As of December 31, 2021, it operated 60 full-service bank branches located in Washington state, Northern and Southern California, the Portland, Oregon, and Hawaii; and five primary stand-alone commercial lending centers in Central Washington, Oregon, Southern California, Idaho, and Utah. HomeStreet, Inc. serves small and medium sized businesses, real estate investors, professional firms, and individuals. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was incorporated in 1921 and is headquartered in Seattle, Washington.
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