Contrasting Bank of South Carolina (NASDAQ:BKSC) and Live Oak Bancshares (NASDAQ:LOB)

Bank of South Carolina (NASDAQ:BKSC) and Live Oak Bancshares (NASDAQ:LOB) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.

Valuation and Earnings

This table compares Bank of South Carolina and Live Oak Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of South Carolina	$21.16 million	4.09	$6.75 million	$1.38	11.62
Live Oak Bancshares	$533.05 million	2.83	$77.47 million	$1.49	22.07

Live Oak Bancshares has higher revenue and earnings than Bank of South Carolina. Bank of South Carolina 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.

Institutional & Insider Ownership

0.2% of Bank of South Carolina shares are owned by institutional investors. Comparatively, 64.0% of Live Oak Bancshares shares are owned by institutional investors. 29.8% of Bank of South Carolina shares are owned by company insiders. Comparatively, 23.4% of Live Oak Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Bank of South Carolina and Live Oak Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of South Carolina	0	0	0	0	0.00
Live Oak Bancshares	0	2	2	0	2.50

Live Oak Bancshares has a consensus target price of $42.50, suggesting a potential upside of 29.25%. Given Live Oak Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe Live Oak Bancshares is more favorable than Bank of South Carolina.

Volatility and Risk

Bank of South Carolina has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500. Comparatively, Live Oak Bancshares has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500.

Dividends

Bank of South Carolina pays an annual dividend of $0.92 per share and has a dividend yield of 5.7%. Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.4%. Bank of South Carolina pays out 66.7% of its earnings in the form of a dividend. Live Oak Bancshares pays out 8.1% 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.

Profitability

This table compares Bank of South Carolina and Live Oak Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of South Carolina	23.42%	13.59%	1.14%
Live Oak Bancshares	7.10%	6.88%	0.55%

Summary

Live Oak Bancshares beats Bank of South Carolina on 10 of the 16 factors compared between the two stocks.

About Bank of South Carolina

Bank of South Carolina Corporation operates as a bank holding company for The Bank of South Carolina that provides a range of financial products and services primarily in Charleston, Berkeley, and Dorchester counties of South Carolina. Its deposits include non-interest-bearing demand accounts, NOW accounts, money market accounts, time deposits, and savings accounts, as well as certificates of deposit. The company offers secured and unsecured commercial loans, commercial real estate construction loans, consumer construction loans, home equity lines of credit, and mortgage originations, as well as paycheck protection program loans. It operates five banking house locations. The company was founded in 1986 and is headquartered in Charleston, South Carolina.

About Live Oak Bancshares

Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various banking products and services in the United States. It operates through two segments, Banking and Fintech. 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; financing for renewable energy application industry; wealth and investment management services to high-net-worth individuals and families; and investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.