Critical Survey: National Bankshares (NASDAQ:NKSH) versus OptimumBank (NASDAQ:OPHC)

OptimumBank (NASDAQ:OPHC) and National Bankshares (NASDAQ:NKSH) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Institutional & Insider Ownership

7.4% of OptimumBank shares are owned by institutional investors. Comparatively, 29.7% of National Bankshares shares are owned by institutional investors. 13.9% of OptimumBank shares are owned by insiders. Comparatively, 2.8% of National Bankshares shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares OptimumBank and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OptimumBank	19.62%	14.10%	1.31%
National Bankshares	11.44%	5.85%	0.50%

Volatility & Risk

OptimumBank has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for OptimumBank and National Bankshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OptimumBank	0	1	0	0	2.00
National Bankshares	0	0	1	0	3.00

OptimumBank currently has a consensus price target of $5.25, suggesting a potential upside of 11.46%. National Bankshares has a consensus price target of $38.00, suggesting a potential upside of 26.41%. Given National Bankshares’ stronger consensus rating and higher probable upside, analysts plainly believe National Bankshares is more favorable than OptimumBank.

Earnings and Valuation

This table compares OptimumBank and National Bankshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OptimumBank	$37.20 million	1.28	$6.28 million	$1.32	3.57
National Bankshares	$43.84 million	4.36	$15.69 million	$1.45	20.73

National Bankshares has higher revenue and earnings than OptimumBank. OptimumBank is trading at a lower price-to-earnings ratio than National Bankshares, indicating that it is currently the more affordable of the two stocks.

Summary

National Bankshares beats OptimumBank on 10 of the 14 factors compared between the two stocks.

About OptimumBank

OptimumBank Holdings, Inc. operates as the bank holding company for OptimumBank that provides various consumer and commercial banking services to individuals and businesses. It accepts demand interest-bearing and noninterest-bearing, savings, money market, and NOW accounts, as well as time deposits, wire transfers, ACH services, and certificates of deposit. The company also offers residential and commercial real estate, multi-family real estate, land and construction loans; commercial loans are generally used for working capital purposes or for acquiring equipment, inventory, and furniture; and consumer loans for various purposes, including purchases of automobiles, recreational vehicles, boats, home improvements, lines of credit, personal, and deposit account collateralized loans. In addition, it provides Visa debit and ATM cards; cash management, notary, and night depository services; and direct deposits, money orders, cashier's checks, domestic collections, and banking by mail, as well as internet banking services. The company was founded in 2000 and is based in Fort Lauderdale, Florida.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.