Nordea Bank (OTCMKTS:NRDBY) vs. Orrstown Financial Services (NASDAQ:ORRF) Critical Comparison

Orrstown Financial Services (NASDAQ:ORRF) and Nordea Bank (OTCMKTS:NRDBY) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, earnings, risk, valuation and institutional ownership.

Volatility & Risk

Orrstown Financial Services has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Nordea Bank has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Profitability

This table compares Orrstown Financial Services and Nordea Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orrstown Financial Services	24.23%	14.41%	1.56%
Nordea Bank	22.74%	15.06%	0.69%

Dividends

Orrstown Financial Services pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. Nordea Bank pays an annual dividend of $0.35 per share and has a dividend yield of 1.9%. Orrstown Financial Services pays out 26.7% of its earnings in the form of a dividend. Nordea Bank pays out 22.0% 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. Orrstown Financial Services has raised its dividend for 10 consecutive years. Orrstown Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent recommendations for Orrstown Financial Services and Nordea Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orrstown Financial Services	0	2	3	0	2.60
Nordea Bank	1	3	3	0	2.29

Orrstown Financial Services currently has a consensus price target of $44.33, suggesting a potential downside of 0.65%. Given Orrstown Financial Services’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Orrstown Financial Services is more favorable than Nordea Bank.

Insider and Institutional Ownership

44.3% of Orrstown Financial Services shares are held by institutional investors. Comparatively, 0.0% of Nordea Bank shares are held by institutional investors. 4.3% of Orrstown Financial Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Orrstown Financial Services and Nordea Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orrstown Financial Services	$356.05 million	2.47	$80.86 million	$4.49	9.94
Nordea Bank	$23.46 billion	2.71	$5.48 billion	$1.59	11.76

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

Summary

Orrstown Financial Services beats Nordea Bank on 9 of the 16 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 Nordea Bank

Nordea Bank Abp offers banking products and services in Sweden, Finland, Norway, Denmark, and internationally. It operates through Personal Banking, Business Banking, Large Corporates & Institutions, and Asset & Wealth Management segments. The Personal Banking segment provides various financial services to customers through mobile banking, over the phone, online meetings, and branch offices. The Business Banking segment offers payments, cash management, cards, working capital management, and cards and finance solutions to corporate and personal customers. The Large Corporates & Institutions segment provides financing, cash management and payment, investment banking, capital market products, and securities services to corporate and institutional customers. The Asset & Wealth Management segment offers investment, savings, and risk management solutions to high net worth individuals and institutional investors. It also offers account-based products, such as lending and deposit; project finance services, asset-based financing through leasing, hire purchase, and factoring, as well as sales to finance partners, such as dealers, vendors, and retailers; financial instruments or arrangement for financial instruments, including currencies, commodities, stocks, and bonds; and asset management, including investment funds, discretionary management, portfolio advice, equity trading, and pension accounts, as well as life insurance and pension products and services. Nordea Bank Abp was founded in 1820 and is headquartered in Helsinki, Finland.