First Busey (NASDAQ:BUSE) versus Orrstown Financial Services (NASDAQ:ORRF) Financial Survey

First Busey (NASDAQ:BUSE) and Orrstown Financial Services (NASDAQ:ORRF) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Valuation & Earnings

This table compares First Busey and Orrstown Financial Services’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Busey $376.03 million 3.73 $98.93 million $2.10 12.00
Orrstown Financial Services $86.69 million 2.35 $12.81 million $1.81 11.85

First Busey has higher revenue and earnings than Orrstown Financial Services. Orrstown Financial Services is trading at a lower price-to-earnings ratio than First Busey, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

45.9% of First Busey shares are owned by institutional investors. Comparatively, 39.8% of Orrstown Financial Services shares are owned by institutional investors. 7.5% of First Busey shares are owned by insiders. Comparatively, 5.0% of Orrstown Financial Services shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares First Busey and Orrstown Financial Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Busey 25.94% 10.23% 1.28%
Orrstown Financial Services 13.42% 9.45% 0.84%

Dividends

First Busey pays an annual dividend of $0.84 per share and has a dividend yield of 3.3%. Orrstown Financial Services pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. First Busey pays out 40.0% of its earnings in the form of a dividend. Orrstown Financial Services pays out 33.1% 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. First Busey has raised its dividend for 5 consecutive years and Orrstown Financial Services has raised its dividend for 3 consecutive years. First Busey is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

First Busey has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Orrstown Financial Services has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for First Busey and Orrstown Financial Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Busey 0 1 3 0 2.75
Orrstown Financial Services 0 1 3 0 2.75

First Busey presently has a consensus target price of $31.33, indicating a potential upside of 24.34%. Orrstown Financial Services has a consensus target price of $26.13, indicating a potential upside of 21.79%. Given First Busey’s higher probable upside, equities analysts clearly believe First Busey is more favorable than Orrstown Financial Services.

Summary

First Busey beats Orrstown Financial Services on 14 of the 15 factors compared between the two stocks.

First Busey Company Profile

First Busey Corporation operates as the bank holding company for Busey Bank that provides retail and commercial banking products and services to individual, corporate, institutional, and governmental customers in the United States. The company operates in three segments: Banking, Remittance Processing, and Wealth Management. It offers customary types of demand and savings deposits; and commercial, agricultural, commercial and residential real estate, and consumer loans, as well as home equity lines of credit. The company also provides money transfer, safe deposit, IRA, Keogh and other fiduciary, ATM and technology-based networks, and online and mobile banking services. In addition, it offers investment management, trust, estate advisory, and financial planning services, as well as business succession planning, and employee retirement planning services; investment strategy consulting and fiduciary services; and security brokerage services. Further, the company provides pay processing solutions, such as walk-in payment processing for payments delivered by customers to retail pay agents; online bill payment solutions for payments made by customers on a billing company's Website; customer service payments for payments accepted over the telephone; direct debit services; electronic concentration of payments delivered by the automated clearing house network; money management software and credit card networks; and lockbox remittance processing of payments delivered by mail. It has 28 banking centers in Illinois; 7 in southwest Florida; and 1 in Indianapolis, Indiana. First Busey Corporation was founded in 1868 and is headquartered in Champaign, Illinois.

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.

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