Associated Banc-Corp (ASB) and Live Oak Bancshares (LOB) Financial Comparison

Associated Banc-Corp (NYSE: ASB) and Live Oak Bancshares (NASDAQ:LOB) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.

Risk and Volatility

Associated Banc-Corp has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, Live Oak Bancshares has a beta of -0.11, indicating that its share price is 111% less volatile than the S&P 500.

Profitability

This table compares Associated Banc-Corp and Live Oak Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Associated Banc-Corp 18.78% 7.43% 0.75%
Live Oak Bancshares 13.71% 11.50% 1.37%

Institutional & Insider Ownership

77.5% of Associated Banc-Corp shares are owned by institutional investors. Comparatively, 37.8% of Live Oak Bancshares shares are owned by institutional investors. 1.8% of Associated Banc-Corp shares are owned by insiders. Comparatively, 30.1% of Live Oak Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for Associated Banc-Corp and Live Oak Bancshares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Associated Banc-Corp 0 10 2 0 2.17
Live Oak Bancshares 0 0 1 0 3.00

Associated Banc-Corp currently has a consensus price target of $25.00, indicating a potential upside of 9.17%. Live Oak Bancshares has a consensus price target of $24.00, indicating a potential upside of 11.63%. Given Live Oak Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe Live Oak Bancshares is more favorable than Associated Banc-Corp.

Valuation & Earnings

This table compares Associated Banc-Corp and Live Oak Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Associated Banc-Corp $1.02 billion 3.40 $210.79 million $1.39 16.47
Live Oak Bancshares $151.53 million 4.26 $21.01 million $0.70 30.71

Associated Banc-Corp has higher revenue and earnings than Live Oak Bancshares. Associated Banc-Corp 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.

Dividends

Associated Banc-Corp pays an annual dividend of $0.48 per share and has a dividend yield of 2.1%. Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.6%. Associated Banc-Corp pays out 34.5% of its earnings in the form of a dividend. Live Oak Bancshares pays out 17.1% 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.

Associated Banc-Corp Company Profile

Associated Banc-Corp is a bank holding company. The Company, through its banking subsidiary Associated Bank, National Association (the Bank) and various nonbanking subsidiaries, provides a range of banking and non-banking products and services to individuals. The Company operates through three segments: Corporate and Commercial Specialty; Community, Consumer, and Business, and Risk Management and Shared Services. The Corporate and Commercial Specialty segment consists of lending and deposit solutions to businesses, developers, not-for-profits, municipalities and financial institutions. The Corporate and Commercial Specialty segment consists of lending and deposit solutions to businesses, developers, not-for-profits, municipalities and financial institutions. The Risk Management and Shared Services segment includes Corporate Risk Management, Credit Administration, Finance, Treasury, Operations and Technology, which are shared functions.

Live Oak Bancshares Company Profile

Live Oak Bancshares, Inc. is a bank holding company. The Company conducts business operations primarily through its commercial bank subsidiary, Live Oak Banking Company (the Bank). The Bank specializes in providing lending services to small businesses nationwide in targeted industries. The loans originated by the Bank are guaranteed by the small business administration (SBA). The Company’s loan portfolio includes commercial and industrial loans; construction and development loans; commercial real estate, and commercial land. The Company’s investment securities include the United States Government agencies, residential mortgage-backed securities and mutual fund. The Company’s deposits include non-interest-bearing deposits and interest-bearing deposits, such as interest-bearing checking, money market and time deposits.

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