Analyzing Orrstown Financial Services (NASDAQ:ORRF) & Investors Bancorp (NASDAQ:ISBC)

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Orrstown Financial Services (NASDAQ:ORRF) and Investors Bancorp (NASDAQ:ISBC) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Volatility & Risk

Orrstown Financial Services has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, Investors Bancorp has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Institutional and Insider Ownership

40.9% of Orrstown Financial Services shares are held by institutional investors. Comparatively, 73.4% of Investors Bancorp shares are held by institutional investors. 5.0% of Orrstown Financial Services shares are held by company insiders. Comparatively, 3.5% of Investors Bancorp shares are held 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.

Profitability

This table compares Orrstown Financial Services and Investors Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orrstown Financial Services 12.07% 9.36% 0.85%
Investors Bancorp 17.21% 7.02% 0.78%

Dividends

Orrstown Financial Services pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. Investors Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 3.6%. Orrstown Financial Services pays out 33.1% of its earnings in the form of a dividend. Investors Bancorp pays out 54.3% 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.

Valuation and Earnings

This table compares Orrstown Financial Services and Investors Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Orrstown Financial Services $86.69 million 2.82 $12.81 million $1.81 12.02
Investors Bancorp $978.50 million 3.43 $202.58 million $0.81 15.09

Investors Bancorp has higher revenue and earnings than Orrstown Financial Services. Orrstown Financial Services is trading at a lower price-to-earnings ratio than Investors Bancorp, 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 Orrstown Financial Services and Investors Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orrstown Financial Services 0 1 2 0 2.67
Investors Bancorp 0 2 4 0 2.67

Orrstown Financial Services presently has a consensus target price of $23.25, indicating a potential upside of 6.90%. Investors Bancorp has a consensus target price of $13.66, indicating a potential upside of 11.78%. Given Investors Bancorp’s higher possible upside, analysts clearly believe Investors Bancorp is more favorable than Orrstown Financial Services.

Summary

Investors Bancorp beats Orrstown Financial Services on 10 of the 15 factors compared between the two stocks.

Orrstown Financial Services Company Profile

Orrstown Financial Services, Inc. operates as the holding company for Orrstown Bank that provides commercial banking and trust services in the United States. The company accepts various deposits, including checking, savings, time, demand, and money market deposits. It also offers commercial loans, such as commercial real estate, equipment, working capital, and other commercial purpose loans; consumer loans comprising home equity and other consumer loans, as well as home equity lines of credit; residential mortgage loans; agribusiness loans; acquisition and development loans; municipal loans; and installment and other loans. In addition, the company provides renders services as trustee, executor, administrator, guardian, managing agent, custodian, and investment advisor, as well as provides other fiduciary services under the Orrstown Financial Advisors name; and offers retail brokerage services through a third-party broker/dealer arrangement. Further, it offers investment advisory services through an office in Lancaster County, Pennsylvania. The company provides its banking and bank-related services through branches located in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York counties of Pennsylvania, as well as Washington County, Maryland. Orrstown Financial Services, Inc. was founded in 1919 and is headquartered in Shippensburg, Pennsylvania.

Investors Bancorp Company Profile

Investors Bancorp, Inc. operates as the holding company for Investors Bank that provides various banking products and services to individuals and businesses in the United States. Its deposit products include savings, checking, and money market accounts, as well as certificates of deposit. The company's loan portfolio comprises multi-family, commercial real estate, commercial and industrial, and construction loans; consumer and other loans primarily consisting of home equity loans, home equity lines of credit, and cash surrender value lending on life insurance contracts; and one-to four-family residential mortgage loans secured by one-to four-family residential real estate. As of December 11, 2018, it operated through a network of 151 branches in New Jersey and New York. The company was founded in 1926 and is headquartered in Short Hills, New Jersey.

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