Live Oak Bancshares (NASDAQ:LOB) vs. Commerce Bancshares (NASDAQ:CBSH) Head-To-Head Analysis

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

Volatility and Risk

Live Oak Bancshares has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500. Comparatively, Commerce Bancshares has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Live Oak Bancshares	10.62%	10.25%	0.81%
Commerce Bancshares	23.33%	16.78%	1.49%

Valuation and Earnings

This table compares Live Oak Bancshares and Commerce Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Live Oak Bancshares	$451.28 million	3.37	$73.90 million	$1.99	16.99
Commerce Bancshares	$1.95 billion	3.73	$477.06 million	$3.59	15.70

Commerce Bancshares has higher revenue and earnings than Live Oak Bancshares. Commerce Bancshares 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.

Institutional and Insider Ownership

64.0% of Live Oak Bancshares shares are owned by institutional investors. Comparatively, 70.3% of Commerce Bancshares shares are owned by institutional investors. 23.9% of Live Oak Bancshares shares are owned by insiders. Comparatively, 3.1% of Commerce Bancshares shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.4%. Commerce Bancshares pays an annual dividend of $1.08 per share and has a dividend yield of 1.9%. Live Oak Bancshares pays out 6.0% of its earnings in the form of a dividend. Commerce Bancshares pays out 30.1% 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. Commerce Bancshares has increased its dividend for 56 consecutive years. Commerce Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Live Oak Bancshares	0	1	2	0	2.67
Commerce Bancshares	0	6	1	0	2.14

Live Oak Bancshares presently has a consensus target price of $39.25, suggesting a potential upside of 16.09%. Commerce Bancshares has a consensus target price of $56.71, suggesting a potential upside of 0.74%. Given Live Oak Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Live Oak Bancshares is more favorable than Commerce Bancshares.

Summary

Commerce Bancshares beats Live Oak Bancshares on 10 of the 17 factors compared between the two stocks.

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.

About Commerce Bancshares

Commerce Bancshares, Inc. operates as the bank holding company for Commerce Bank that provides retail, mortgage banking, corporate, investment, trust, and asset management products and services to individuals and businesses in the United States. It operates through three segments: Consumer, Commercial, and Wealth. The Consumer segment offers various banking products and services, including consumer deposits; consumer loans, such as automobile, motorcycle, marine, tractor/trailer, recreational vehicle, fixed rate and revolving home equity, and other consumer loans; patient health care financing; real estate loans; indirect and other consumer financing; retail branch network; personal mortgage banking; consumer installment lending; and consumer debit and credit bank cards. The Commercial segment provides corporate lending, leasing, international, merchant and commercial bank card, and securities safekeeping and bond accounting services; and business products, government deposits, and related commercial cash management services, as well as sells fixed income securities to correspondent banks, corporations, public institutions, municipalities, and individuals. The Wealth segment provides traditional trust and estate planning, advisory and discretionary investment portfolio management, and brokerage services, as well as private banking accounts. The company also offers private equity investment, securities brokerage, insurance agency, specialty lending, and leasing services, as well as online and mobile banking services. Commerce Bancshares, Inc. was founded in 1865 and is headquartered in Kansas City, Missouri.