Orrstown Financial Services (NASDAQ:ORRF) vs. Chiba Bank (OTCMKTS:CHBAY) Financial Review

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Chiba Bank	20.96%	8.25%	0.49%
Orrstown Financial Services	24.23%	14.41%	1.56%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Chiba Bank and Orrstown Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chiba Bank	0	1	0	0	2.00
Orrstown Financial Services	0	2	3	0	2.60

Orrstown Financial Services has a consensus target price of $44.33, suggesting a potential downside of 0.24%. Given Orrstown Financial Services’ stronger consensus rating and higher probable upside, analysts clearly believe Orrstown Financial Services is more favorable than Chiba Bank.

Dividends

Chiba Bank pays an annual dividend of $1.23 per share and has a dividend yield of 1.4%. Orrstown Financial Services pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. Chiba Bank pays out 26.1% of its earnings in the form of a dividend. Orrstown Financial Services pays out 26.7% 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. 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.

Valuation and Earnings

This table compares Chiba Bank and Orrstown Financial Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chiba Bank	$2.96 billion	4.73	$620.82 million	$4.72	19.12
Orrstown Financial Services	$356.05 million	2.46	$80.86 million	$4.49	9.90

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

Volatility & Risk

Chiba Bank has a beta of 0.16, indicating that its share price is 84% less volatile than the S&P 500. Comparatively, Orrstown Financial Services has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Institutional & Insider Ownership

44.3% of Orrstown Financial Services 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, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Orrstown Financial Services beats Chiba Bank on 11 of the 17 factors compared between the two stocks.

About Chiba Bank

The Chiba Bank, Ltd., together with its subsidiaries, provides banking products and services in Japan and internationally. The company offers various deposit products, including savings, time deposits, currency deposits, investment trusts, bonds, and pensions; loans, which include mortgages, renovation loans, photovoltaic, vehicle, education, and other loan products; and insurance products, such as annuity, life, medical, student, death, and travel insurance. It also offers debit and credit cards, as well as internet banking services. In addition, the company engages in securities, investment management and advisory, software development, commissioned computation tasks, research and investigation of IT and financial technologies, leasing, operation, and management of investment funds, mergers and acquisition advisory, credit guarantee businesses, management and collection of claims businesses. Further, it provides loan guarantees and fee collection services; accounting, general administration entrustment, and temporary staff services; and is involved in outsourcing of operational business. Additionally, it rents and maintains office buildings and welfare facilities; provides research, survey, and consulting services; purchases and sells supplies and consumer goods; and engages in renewable energy generation. The company serves individuals and corporations. The Chiba Bank, Ltd. was incorporated in 1943 and is headquartered in Chiba City, Japan.

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.