Origin Bancorp (NASDAQ:OBNK) versus Lakeland Financial (NASDAQ:LKFN) Critical Review

Lakeland Financial (NASDAQ:LKFN) and Origin Bancorp (NASDAQ:OBNK) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.

Profitability

This table compares Lakeland Financial and Origin Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lakeland Financial	22.85%	13.64%	1.37%
Origin Bancorp	20.47%	10.45%	0.97%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Lakeland Financial and Origin Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lakeland Financial	0	2	1	0	2.33
Origin Bancorp	0	0	0	0	0.00

Lakeland Financial presently has a consensus price target of $71.00, indicating a potential downside of 4.70%. Given Lakeland Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Lakeland Financial is more favorable than Origin Bancorp.

Dividends

Lakeland Financial pays an annual dividend of $1.92 per share and has a dividend yield of 2.6%. Origin Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 1.7%. Lakeland Financial pays out 49.9% of its earnings in the form of a dividend. Origin Bancorp pays out 18.7% 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. Lakeland Financial has raised its dividend for 13 consecutive years and Origin Bancorp has raised its dividend for 4 consecutive years. Lakeland Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

81.2% of Lakeland Financial shares are held by institutional investors. Comparatively, 47.2% of Origin Bancorp shares are held by institutional investors. 3.3% of Lakeland Financial shares are held by company insiders. Comparatively, 6.2% of Origin Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Lakeland Financial has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Origin Bancorp has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Valuation and Earnings

This table compares Lakeland Financial and Origin Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lakeland Financial	$393.12 million	4.83	$93.77 million	$3.85	19.35
Origin Bancorp	$347.14 million	3.06	$87.71 million	$3.21	10.75

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

Summary

Lakeland Financial beats Origin Bancorp on 14 of the 17 factors compared between the two stocks.

About Lakeland Financial

Lakeland Financial Corporation operates as the bank holding company for Lake City Bank that provides various banking products and services in the United States. The company accepts various deposit products, such as noninterest bearing, interest-bearing checking, savings, money market, NOW, and demand deposits. Its loan products include commercial and industrial, commercial real estate and multi-family residential, construction, agri-business and agricultural, consumer 1-4 family mortgage, and other commercial and consumer loans. The company also provides retail and merchant credit card services; corporate treasury management, wealth advisory, and trust services; retail brokerage services, including various financial and investment products, such as annuities and life insurance; and mobile business banking and on-line treasury management services. It serves commercial real estate, manufacturing, agriculture, construction, retail, wholesale, finance and insurance, accommodation and food services, and health care industries. The company was founded in 1872 and is headquartered in Warsaw, Indiana.

About Origin Bancorp

Origin Bancorp, Inc. is a bank holding company, which engages in the provision of financial services to small and medium-sized businesses, municipalities, high net worth individuals, and retail clients. The firm’s products and services include lending, deposits, mortgage banking, and insurance. It also offers other banking services such as Internet banking and voice response information, mobile applications, cash management, overdraft protection, direct deposit, safe deposit boxes, U.S. savings bonds, and automatic account transfers. The company was founded in 1991 and is headquartered in Ruston, LA.