Critical Analysis: WaFd (NASDAQ:WAFD) versus Oak Valley Bancorp (NASDAQ:OVLY)

WaFd (NASDAQ:WAFD) and Oak Valley Bancorp (NASDAQ:OVLY) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, profitability, earnings, institutional ownership, analyst recommendations, valuation and dividends.

Dividends

WaFd pays an annual dividend of $1.08 per share and has a dividend yield of 3.0%. Oak Valley Bancorp pays an annual dividend of $0.75 per share and has a dividend yield of 2.2%. WaFd pays out 35.3% of its earnings in the form of a dividend. Oak Valley Bancorp pays out 26.0% 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. WaFd has increased its dividend for 2 consecutive years and Oak Valley Bancorp has increased its dividend for 11 consecutive years.

Earnings and Valuation

This table compares WaFd and Oak Valley Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WaFd	$762.89 million	3.50	$226.07 million	$3.06	11.80
Oak Valley Bancorp	$83.09 million	3.52	$23.91 million	$2.88	12.07

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

Profitability

This table compares WaFd and Oak Valley Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WaFd	18.25%	8.94%	0.90%
Oak Valley Bancorp	24.80%	11.99%	1.20%

Analyst Ratings

This is a breakdown of recent ratings and target prices for WaFd and Oak Valley Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WaFd	0	4	1	1	2.50
Oak Valley Bancorp	0	0	1	0	3.00

WaFd currently has a consensus target price of $34.80, indicating a potential downside of 3.63%. Given WaFd’s higher possible upside, analysts plainly believe WaFd is more favorable than Oak Valley Bancorp.

Volatility & Risk

WaFd has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500. Comparatively, Oak Valley Bancorp has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500.

Insider and Institutional Ownership

83.7% of WaFd shares are owned by institutional investors. Comparatively, 30.9% of Oak Valley Bancorp shares are owned by institutional investors. 1.5% of WaFd shares are owned by insiders. Comparatively, 13.9% of Oak Valley Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Oak Valley Bancorp beats WaFd on 9 of the 17 factors compared between the two stocks.

About WaFd

WaFd, Inc operates as the bank holding company for Washington Federal Bank that provides lending, depository, insurance, and other banking services in the United States. The company offers deposit products, including business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also provides single-family dwellings, construction, land acquisition and development, consumer lot, multi-family residential, commercial real estate, home equity, business, and consumer loans, as well as commercial and industrial loans. In addition, the company offers insurance brokerage services, such as individual and business insurance policies; holds and markets real estate properties; and debit and credit cards, as well as acts as the trustee. It serves consumers, mid-sized and large businesses, and owners and developers of commercial real estate. The company was formerly known as Washington Federal, Inc. and changed its name to WaFd, Inc in September 2023. WaFd, Inc was founded in 1917 and is headquartered in Seattle, Washington.

About Oak Valley Bancorp

Oak Valley Bancorp operates as the bank holding company for Oak Valley Community Bank that provides a range of commercial banking services to individuals and small to medium-sized businesses in the Central Valley and the Eastern Sierras. The company's deposits products include checking and savings, money market, health savings, and individual retirement accounts, as well as certificates of deposit. It also offers commercial real estate loans, commercial business lending and trade finance, and small business administration lending, as well as consumer loans, including automobile loans, home mortgages, credit lines, and other personal loans. In addition, the company provides online and mobile banking, remote deposit capture, merchant, night depository, extended hours, wire transfer of funds, note collection services, and automated teller machines. The company was incorporated in 1990 and is headquartered in Oakdale, California.