Investar (NASDAQ:ISTR – Get Free Report) and Eagle Bancorp Montana (NASDAQ:EBMT – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.
Dividends
Investar pays an annual dividend of $0.42 per share and has a dividend yield of 1.8%. Eagle Bancorp Montana pays an annual dividend of $0.57 per share and has a dividend yield of 3.3%. Investar pays out 23.5% of its earnings in the form of a dividend. Eagle Bancorp Montana pays out 52.8% 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. Eagle Bancorp Montana has raised its dividend for 14 consecutive years. Eagle Bancorp Montana is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility & Risk
Investar has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Eagle Bancorp Montana has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Investar | $80.05 million | 2.90 | $16.68 million | $1.79 | 13.20 |
| Eagle Bancorp Montana | $114.34 million | 1.21 | $10.06 million | $1.08 | 16.03 |
Investar has higher earnings, but lower revenue than Eagle Bancorp Montana. Investar is trading at a lower price-to-earnings ratio than Eagle Bancorp Montana, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Investar and Eagle Bancorp Montana, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Investar | 0 | 0 | 1 | 0 | 3.00 |
| Eagle Bancorp Montana | 0 | 1 | 0 | 0 | 2.00 |
Investar currently has a consensus target price of $20.00, indicating a potential downside of 15.36%. Eagle Bancorp Montana has a consensus target price of $13.50, indicating a potential downside of 22.01%. Given Investar’s stronger consensus rating and higher probable upside, equities analysts plainly believe Investar is more favorable than Eagle Bancorp Montana.
Profitability
This table compares Investar and Eagle Bancorp Montana’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Investar | 11.35% | 6.94% | 0.58% |
| Eagle Bancorp Montana | 7.03% | 4.96% | 0.41% |
Insider and Institutional Ownership
50.2% of Investar shares are owned by institutional investors. Comparatively, 35.7% of Eagle Bancorp Montana shares are owned by institutional investors. 8.7% of Investar shares are owned by insiders. Comparatively, 6.7% of Eagle Bancorp Montana shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Summary
Investar beats Eagle Bancorp Montana on 13 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 Eagle Bancorp Montana
Eagle Bancorp Montana, Inc. operates as the bank holding company for Opportunity Bank of Montana that provides various retail banking products and services to small businesses and individuals in Montana. It accepts various deposit products, such as checking, savings, money market, and individual retirement accounts, as well as certificates of deposit accounts. The company also provides 1-4 family residential mortgage loans, such as residential mortgages and construction of residential properties; commercial real estate loans, including multi-family dwellings, nonresidential property, commercial construction and development, and farmland loans; and second mortgage/home equity loans. In addition, it offers consumer loans, such as loans secured by collateral other than real estate, such as automobiles, recreational vehicles, and boats; personal loans and lines of credit; commercial business loans consisting of business loans and lines of credit on a secured and unsecured basis; construction loans; agricultural loans; and mortgage loan services. The company operates full-service branches and automated teller machines. Eagle Bancorp Montana, Inc. was founded in 1922 and is headquartered in Helena, Montana.
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