Head to Head Comparison: Pinnacle Bankshares (OTCMKTS:PPBN) versus Investar (NASDAQ:ISTR)

Investar (NASDAQ:ISTR) and Pinnacle Bankshares (OTCMKTS:PPBN) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, analyst recommendations, profitability, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Investar and Pinnacle Bankshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Investar	0	1	2	0	2.67
Pinnacle Bankshares	0	0	0	0	0.00

Investar presently has a consensus target price of $29.00, indicating a potential upside of 10.64%. Given Investar’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Investar is more favorable than Pinnacle Bankshares.

Dividends

Investar pays an annual dividend of $0.44 per share and has a dividend yield of 1.7%. Pinnacle Bankshares pays an annual dividend of $1.12 per share and has a dividend yield of 2.6%. Investar pays out 19.6% of its earnings in the form of a dividend. Pinnacle Bankshares pays out 23.1% 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. Investar has increased its dividend for 10 consecutive years.

Earnings & Valuation

This table compares Investar and Pinnacle Bankshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Investar	$89.42 million	2.88	$20.25 million	$2.24	11.70
Pinnacle Bankshares	$55.62 million	1.76	$9.18 million	$4.84	9.05

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

Profitability

This table compares Investar and Pinnacle Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Investar	14.87%	9.38%	0.86%
Pinnacle Bankshares	18.14%	12.94%	1.03%

Volatility & Risk

Investar has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, Pinnacle Bankshares has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500.

Insider and Institutional Ownership

50.2% of Investar shares are held by institutional investors. Comparatively, 3.8% of Pinnacle Bankshares shares are held by institutional investors. 8.8% of Investar shares are held by insiders. Comparatively, 6.5% of Pinnacle Bankshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Investar beats Pinnacle Bankshares on 12 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 Pinnacle Bankshares

Pinnacle Bankshares Corporation operates as the bank holding company for First National Bank that provides a range of commercial and retail banking products and services. The company accepts checking accounts, savings and time deposits, individual retirement accounts, certificates of deposit, and money market accounts. Its loan products include residential and commercial mortgage loans, home equity loans, consumer installment loans, agricultural loans, investment loans, small business loans, commercial lines of credit, and letters of credit. The company also provides credit cards; insurance products, including property and casualty, life, and health; investment and annuity products; and overdraft protection, merchant bankcard processing, cash management, remote deposit capture, night drop, safe deposit boxes, and notary services, as well as telephone, mobile, and online banking services. It operates branches in Amherst County, Bedford County, Campbell County, Pittsylvania County; and the city of Danville, Lynchburg and Charlottesville. The company was founded in 1908 and is headquartered in Altavista, Virginia.