1st Source (NASDAQ:SRCE) & Origin Bancorp (NASDAQ:OBNK) Critical Contrast

1st Source (NASDAQ:SRCE) and Origin Bancorp (NASDAQ:OBNK) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, profitability, institutional ownership and analyst recommendations.

Earnings & Valuation

This table compares 1st Source and Origin Bancorp’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
1st Source	$376.44 million	3.78	$124.93 million	$4.97	11.69
Origin Bancorp	$347.14 million	2.77	$87.71 million	$3.21	9.74

1st Source has higher revenue and earnings than Origin Bancorp. Origin Bancorp is trading at a lower price-to-earnings ratio than 1st Source, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

74.4% of 1st Source shares are held by institutional investors. Comparatively, 47.2% of Origin Bancorp shares are held by institutional investors. 19.3% of 1st Source shares are held by insiders. Comparatively, 6.2% of Origin Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

1st Source pays an annual dividend of $1.44 per share and has a dividend yield of 2.5%. Origin Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. 1st Source pays out 29.0% 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. 1st Source has raised its dividend for 37 consecutive years and Origin Bancorp has raised its dividend for 4 consecutive years. 1st Source is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for 1st Source and Origin Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
1st Source	0	2	0	0	2.00
Origin Bancorp	0	0	0	0	N/A

1st Source presently has a consensus price target of $64.75, suggesting a potential upside of 11.45%. Given 1st Source’s higher probable upside, research analysts plainly believe 1st Source is more favorable than Origin Bancorp.

Volatility & Risk

1st Source has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, Origin Bancorp has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Profitability

This table compares 1st Source and Origin Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
1st Source	23.23%	12.02%	1.47%
Origin Bancorp	20.47%	10.45%	0.97%

Summary

1st Source beats Origin Bancorp on 13 of the 15 factors compared between the two stocks.

About 1st Source

1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and wealth advisory services, and insurance products to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate mortgage loans, and home equity lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for construction equipment, new and pre-owned aircraft, auto and light trucks, and medium and heavy duty trucks; and finances construction equipment, aircrafts, medium and heavy duty trucks, step vans, vocational work trucks, motor coaches, shuttle buses, funeral cars, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, 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.