Contrasting Oak Ridge Financial Services (OTCMKTS:BKOR) and National Bank (NYSE:NBHC)

National Bank (NYSE:NBHC) and Oak Ridge Financial Services (OTCMKTS:BKOR) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.

Profitability

This table compares National Bank and Oak Ridge Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bank	21.40%	10.44%	1.28%
Oak Ridge Financial Services	14.47%	N/A	N/A

Dividends

National Bank pays an annual dividend of $1.12 per share and has a dividend yield of 2.7%. Oak Ridge Financial Services pays an annual dividend of $0.48 per share and has a dividend yield of 2.6%. National Bank pays out 32.2% of its earnings in the form of a dividend. Oak Ridge Financial Services pays out 22.5% 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 current ratings and price targets for National Bank and Oak Ridge Financial Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bank	0	3	2	0	2.40
Oak Ridge Financial Services	0	0	0	0	N/A

National Bank presently has a consensus price target of $46.40, indicating a potential upside of 12.16%. Given National Bank’s higher probable upside, research analysts plainly believe National Bank is more favorable than Oak Ridge Financial Services.

Insider and Institutional Ownership

92.7% of National Bank shares are held by institutional investors. Comparatively, 4.2% of Oak Ridge Financial Services shares are held by institutional investors. 3.1% of National Bank shares are held by company insiders. Comparatively, 25.6% of Oak Ridge Financial Services shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

National Bank has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Oak Ridge Financial Services has a beta of 0.35, indicating that its stock price is 65% less volatile than the S&P 500.

Earnings and Valuation

This table compares National Bank and Oak Ridge Financial Services’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bank	$406.12 million	3.85	$142.05 million	$3.48	11.89
Oak Ridge Financial Services	$35.36 million	1.42	$5.74 million	$2.13	8.52

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

Summary

National Bank beats Oak Ridge Financial Services on 13 of the 15 factors compared between the two stocks.

About National Bank

National Bank Holdings Corporation operates as the bank holding company for NBH Bank that provides various banking products and financial services to commercial, business, and consumer clients in the United States. It offers deposit products, including checking, savings, money market, and other deposit accounts, including fixed-rate and fixed maturity time deposits. The company also provides commercial and industrial loans and leases, such as working capital loans, equipment loans, lender finance loans, food and agriculture loans, government and non-profit loans, owner occupied commercial real estate loans, and other commercial loans and leases; non-owner occupied commercial real estate loans consisting of loans on commercial properties, such as office buildings, warehouse/distribution buildings, multi-family, hospitality, and retail buildings; small business administration loans to support small businesses and entrepreneurs; term loans, line of credits, and real estate secured loans; residential real estate loans; and consumer loans. In addition, it offers treasury management solutions comprising online and mobile banking, commercial credit card, wire transfer, automated clearing house, electronic bill payment, lock box, remote deposit capture, merchant processing, cash vault, controlled disbursements, and fraud prevention services, as well as other auxiliary services, including account reconciliation, collections, repurchase accounts, zero balance accounts, and sweep accounts. The company operates through a network of banking centers located in Colorado, the greater Kansas City region, New Mexico, Utah, Wyoming, Idaho, and Texas. It also operates ATMs. The company was formerly known as NBH Holdings Corp. and changed its name to National Bank Holdings Corporation in March 2012. The company was incorporated in 2009 and is headquartered in Greenwood Village, Colorado.

About Oak Ridge Financial Services

Oak Ridge Financial Services, Inc. operates as a bank holding company for Bank of Oak Ridge that provides various banking products and services for individuals and businesses. It offers checking, savings, and money market accounts; overdrafts; auto, home equity, mortgage, business term, and business SBA loans; business lines of credit; credit cards; and online and mobile banking products and services. The company also provides health savings accounts, identity theft protection, wealth management, cash management, and remote deposit capture services; and auto, home, small business, renters, life, boat and watercraft, classic car, motorcycle, flood, pet, and umbrella insurance products. It operates through a network of branches in Oak Ridge, Greensboro, and Summerfield, North Carolina. The company was founded in 2000 and is based in Oak Ridge, North Carolina.