Critical Review: Orange County Bancorp (NASDAQ:OBT) vs. Shore Bancshares (NASDAQ:SHBI)

Shore Bancshares (NASDAQ:SHBI) and Orange County Bancorp (NASDAQ:OBT) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Dividends

Shore Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 2.4%. Orange County Bancorp pays an annual dividend of $0.72 per share and has a dividend yield of 2.1%. Shore Bancshares pays out 27.0% of its earnings in the form of a dividend. Orange County Bancorp pays out 21.7% 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.

Institutional and Insider Ownership

59.8% of Shore Bancshares shares are owned by institutional investors. Comparatively, 42.6% of Orange County Bancorp shares are owned by institutional investors. 8.7% of Shore Bancshares shares are owned by company insiders. Comparatively, 9.3% of Orange County Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Shore Bancshares and Orange County Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shore Bancshares	$342.72 million	1.92	$59.51 million	$1.78	11.06
Orange County Bancorp	$158.13 million	2.96	$41.61 million	$3.32	10.55

Shore Bancshares has higher revenue and earnings than Orange County Bancorp. Orange County Bancorp is trading at a lower price-to-earnings ratio than Shore Bancshares, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for Shore Bancshares and Orange County Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shore Bancshares	0	2	3	0	2.60
Orange County Bancorp	0	1	3	0	2.75

Shore Bancshares presently has a consensus price target of $20.17, suggesting a potential upside of 2.47%. Orange County Bancorp has a consensus price target of $37.00, suggesting a potential upside of 5.68%. Given Orange County Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Orange County Bancorp is more favorable than Shore Bancshares.

Risk and Volatility

Shore Bancshares has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, Orange County Bancorp has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500.

Profitability

This table compares Shore Bancshares and Orange County Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shore Bancshares	17.36%	11.62%	1.07%
Orange County Bancorp	26.32%	17.24%	1.60%

Summary

Orange County Bancorp beats Shore Bancshares on 9 of the 15 factors compared between the two stocks.

About Shore Bancshares

Shore Bancshares, Inc. operates as a bank holding company for the Shore United Bank, N.A. that provides various commercial and consumer banking products and services to individuals, businesses, and other organizations. It offers checking, savings, overnight investment sweep, and money market accounts; and regular and IRA certificates of deposit, as well as CDARS programs and cash management services. The company also provides commercial loans, such as secured and unsecured loans, working capital loans, lines of credit, term loans, accounts receivable financing, real estate acquisition and development loans, construction loans, and letters of credit; residential real estate construction loans; residential mortgage loans; and loans to consumers, including home equity, automobile, installment, home improvement, and personal lines of credit, as well as other consumer financing products. In addition, it offers trust, asset management, and financial planning services; treasury management services, such as merchant card processing, remote deposit capture, and ACH origination, as well as telephone, mobile, and Internet banking services; safe deposit boxes; debit and credit cards; and automatic teller machine services. Shore Bancshares, Inc. was founded in 1876 and is headquartered in Easton, Maryland.

About Orange County Bancorp

Orange County Bancorp, Inc., through its subsidiaries, provides commercial and consumer banking products and services, and trust and wealth management services to small businesses, middle-market enterprises, local municipal governments, and individuals. It accepts various deposits, including interest-bearing and noninterest-bearing demand accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company also offers commercial real estate loans, commercial and industrial loans, commercial real estate construction loans, residential real estate loans, home equity loans, and consumer loans. In addition, it provides traditional trust and administration, asset management, financial planning, and wealth management services. The company operates full-service branches and loan production office in Orange, Westchester, Rockland, and Bronx counties in New York. Orange County Bancorp, Inc. was founded in 1892 and is headquartered in Middletown, New York.