Contrasting Investar (NASDAQ:ISTR) and Bank Of Montreal (NYSE:BMO)

Investar (NASDAQ:ISTR) and Bank Of Montreal (NYSE:BMO) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, profitability, institutional ownership, dividends, valuation and risk.

Institutional & Insider Ownership

50.2% of Investar shares are held by institutional investors. Comparatively, 45.8% of Bank Of Montreal shares are held by institutional investors. 10.6% of Investar shares are held by insiders. Comparatively, 1.0% of Bank Of Montreal shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for Investar and Bank Of Montreal, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Investar	0	2	1	0	2.33
Bank Of Montreal	1	6	6	0	2.38

Investar presently has a consensus price target of $31.50, suggesting a potential upside of 9.79%. Bank Of Montreal has a consensus price target of $244.00, suggesting a potential upside of 47.02%. Given Bank Of Montreal’s stronger consensus rating and higher possible upside, analysts plainly believe Bank Of Montreal is more favorable than Investar.

Profitability

This table compares Investar and Bank Of Montreal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Investar	17.55%	11.65%	1.14%
Bank Of Montreal	11.72%	13.60%	0.71%

Risk & Volatility

Investar has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500. Comparatively, Bank Of Montreal has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.

Dividends

Investar pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. Bank Of Montreal pays an annual dividend of $4.81 per share and has a dividend yield of 2.9%. Investar pays out 19.8% of its earnings in the form of a dividend. Bank Of Montreal pays out 54.3% 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. Investar has raised its dividend for 10 consecutive years and Bank Of Montreal has raised its dividend for 4 consecutive years.

Earnings & Valuation

This table compares Investar and Bank Of Montreal”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Investar	$153.48 million	2.58	$22.90 million	$2.43	11.81
Bank Of Montreal	$55.92 billion	2.06	$6.22 billion	$8.86	18.73

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

Summary

Bank Of Montreal beats Investar on 10 of the 17 factors compared between the two stocks.

About Investar

Investar Holding Corporation operates as the bank holding company for Investar Bank that provides a range of commercial banking products to individuals, professionals, and small to medium-sized businesses in south Louisiana, southeast Texas, and Alabama in the United States. The company offers various deposit products and services, such as savings, checking, money market, and individual retirement accounts, as well as various certificates of deposit; debit and credit cards; internet, mobile, and video banking services; and reciprocal deposit products. It also provides commercial real estate loans; commercial and industrial loans, including working capital lines of credit and equipment loans; loans for the construction of commercial projects, and single family residential and multifamily properties; one-to-four family residential real estate loans, such as second mortgage loans; and consumer loans, such as secured and unsecured installment and term loans, home equity loans and lines of credit, and auto loans, as well as loans for personal, family, and household purposes. In addition, the company offers treasury management products, including remote deposit capture, lockbox payment processing, virtual vault, positive pay, ACH origination, wire transfer, investment sweep accounts, and business internet banking services. Further, it provides various other banking services, such as cashiers' checks, direct deposit of payroll and social security checks, night depository, bank-by-mail, automated teller machines, electronic statements, interactive teller machines, online account opening, and mobile wallet payment services. Investar Holding Corporation was founded in 2006 and is headquartered in Baton Rouge, Louisiana.

About Bank Of Montreal

Bank of Montreal provides diversified financial services primarily in North America. It operates through Canadian P&C, U.S P&C, BMO Wealth Management, and BMO Capital Markets segments. The company’s personal banking products and services include deposits, mortgages, home lending, consumer credit, small business lending, credit cards, cash management, financial and investment advice, and other banking services; and commercial banking products and services comprise various of financing options and treasury and payment solutions, as well as risk management products. It also offers investing, banking, and wealth management advisory; digital investing services; financial solutions for individuals, families, and businesses; provides investment management services to institutional, retail, and high net worth investors; and diversified insurance, and wealth and pension de-risking solutions. In addition, the company provides individual life, critical illness and annuity products, as well as segregated funds, and group creditor and travel insurance to customers; debt and equity capital-raising, loan origination and syndication, balance sheet management, treasury management, mergers and acquisitions advice, restructurings and recapitalizations, trade finance, and risk mitigation services, as well as a range of banking and other operating services. Further, the company offers research and access to financial markets for institutional, corporate and retail clients through an integrated suite of sales and trading solutions related to debt, foreign exchange, interest rates, credit, equities, securitization, and commodities; provides new product development and origination services, as well as risk management and advisory services for hedging strategies, including in interest rates, foreign exchange rates and commodities prices; and funding and liquidity management services. The company was founded in 1817 and is headquartered in Montreal, Canada.