Critical Contrast: Live Oak Bancshares (NASDAQ:LOB) versus First BanCorp. (NYSE:FBP)

First BanCorp. (NYSE:FBP) and Live Oak Bancshares (NASDAQ:LOB) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Profitability

This table compares First BanCorp. and Live Oak Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First BanCorp.	25.91%	21.86%	1.68%
Live Oak Bancshares	11.22%	11.13%	0.88%

Volatility & Risk

First BanCorp. has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, Live Oak Bancshares has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500.

Dividends

First BanCorp. pays an annual dividend of $0.64 per share and has a dividend yield of 3.0%. Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. First BanCorp. pays out 36.6% of its earnings in the form of a dividend. Live Oak Bancshares pays out 6.0% 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.

Insider & Institutional Ownership

97.9% of First BanCorp. shares are owned by institutional investors. Comparatively, 64.0% of Live Oak Bancshares shares are owned by institutional investors. 2.5% of First BanCorp. shares are owned by company insiders. Comparatively, 23.9% of Live Oak Bancshares shares are owned 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.

Valuation & Earnings

This table compares First BanCorp. and Live Oak Bancshares’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First BanCorp.	$892.06 million	3.95	$302.86 million	$1.75	12.09
Live Oak Bancshares	$467.62 million	4.04	$73.90 million	$1.99	21.13

First BanCorp. has higher revenue and earnings than Live Oak Bancshares. First BanCorp. 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.

Analyst Ratings

This is a summary of current ratings and target prices for First BanCorp. and Live Oak Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First BanCorp.	0	2	3	0	2.60
Live Oak Bancshares	0	2	2	0	2.50

First BanCorp. presently has a consensus price target of $20.83, indicating a potential downside of 1.50%. Live Oak Bancshares has a consensus price target of $47.25, indicating a potential upside of 12.39%. Given Live Oak Bancshares’ higher probable upside, analysts clearly believe Live Oak Bancshares is more favorable than First BanCorp..

Summary

First BanCorp. beats Live Oak Bancshares on 9 of the 16 factors compared between the two stocks.

About First BanCorp.

First BanCorp. operates as a bank holding company for FirstBank Puerto Rico that provides a range of financial products and services to consumers and commercial customers. The company operates through six segments: Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans, as well as other products, such as cash management and business management services. The Mortgage Banking segment engages in the origination, sale, and servicing of various residential mortgage loans; hedging activities; and purchase of mortgage loans from branch and mortgage bankers. The Consumer (Retail) Banking segment provides auto loans, finance leases, boat and personal loans, credit card loans, and lines of credit; and interest-bearing and non-interest-bearing checking and savings accounts, and individual retirement accounts and retail certificates of deposit (CDs), as well as insurance agency services. The Treasury and Investments segment offers funding and liquidity management services. The United States Operations segment provides checking, savings, and money market accounts, as well as retail CDs; traditional commercial and industrial, and commercial real estate loans, residential mortgages, term and construction loan, home equity loans, lines of credit, FHLB advances, and brokered CDs; and internet banking, cash management, remote deposit capture, and automated clearing house transactions services. The Virgin Islands Operations segment is involved in consumer, commercial lending, and deposit-taking activities. First BanCorp. was founded in 1948 and is headquartered in San Juan, Puerto Rico.

About Live Oak Bancshares

Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various banking products and services in the United States. It operates through two segments, Banking and Fintech. The company accepts various deposit products, including noninterest-bearing demand, as well as interest-bearing checking, money market, savings, and time deposits. It also offers commercial and industrial loans; construction and development loans; owner occupied and non-owner occupied collateral commercial real estate loans; and commercial land loans. In addition, the company provides settlement, accounting, and securitization services for government guaranteed loans; financing for renewable energy application industry; wealth and investment management services to high-net-worth individuals and families; and investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.