Oak Valley Bancorp (NASDAQ: OVLY)

Sector: Financial Services Industry: Banks - Regional CIK: 0001431567
Market Cap 246.63 Mn
P/B 1.24
P/E 10.46
P/S 3.09
ROIC (Qtr) 12.35
Div Yield % 2.00
Rev 1y % (Qtr) 0.52
Total Debt (Qtr) 0.00
Debt/Equity (Qtr) 0.00

About

Oak Valley Bancorp (OVLY) is a California state-chartered bank that operates as the parent company of Oak Valley Community Bank. Since its incorporation in 1990, the bank has grown to become a significant player in the banking industry in the California Central Valley and Eastern Sierra regions. Oak Valley Bancorp's main business activities revolve around providing a range of banking services to individuals and businesses in its primary market areas. The bank offers a variety of deposit products, including certificates of deposit, regular savings...

Read more

Price action

Investment thesis

Bull case

  • Operating cash flow of 24.95M provides strong 28.87x coverage of stock compensation 864000, indicating sustainable incentive practices.
  • Robust free cash flow of 20.52M exceeds capital expenditure of 4.42M by 4.64x, indicating strong organic growth funding capability.
  • Retained earnings of 188.06M represent substantial 0.95x of equity 198.28M, indicating strong internal capital generation.
  • Retained earnings of 188.06M provide strong 56.44x coverage of intangibles 3.33M, indicating quality earnings retention.
  • Free cash flow of 20.52M provides solid 1.40x coverage of operating expenses 14.63M, showing operational efficiency.

Bear case

  • Operating cash flow of 24.95M barely covers its investment activities of (70.97M), with a coverage ratio of -0.35, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 24.95M provides thin coverage of dividend payments of (5.02M) with a -4.97 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 247.16M provide limited coverage of acquisition spending of (6.78M), which is -36.48x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Retained earnings of 188.06M provide limited buffer against comprehensive income items of (21.79M), which is -8.63x, indicating elevated exposure to market risks.
  • R&D investment of 0 represents just 0x of SG&A expenses of 34.93M, indicating potential underinvestment in innovation relative to administrative overhead.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.02 0.14
EV to Cash from Ops. EV/CFO 1.91 7.21
EV to Debt EV to Debt 0.00 5.20
EV to EBIT EV/EBIT 1.58 14.98
EV to EBITDA EV/EBITDA 1.53 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 2.33 8.87
EV to Market Cap EV to Market Cap 0.19 1.04
EV to Revenue EV/Rev 0.60 -3.76
Price to Book Value [P/B] P/B 1.24 1.17
Price to Earnings [P/E] P/E 10.46 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 4.70 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 20.90 35.28
Dividend per Basic Share Div per Share (Qtr) 0.60 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 24.50 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -279.81 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 15.54 15.78
Dividend Growth (1y) % Div 1y % (Qtr) 33.33 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -4.91 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -6.03 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) -6.26 61.46
EBT Growth (1y) % EBT 1y % (Qtr) -6.26 61.37
EPS Growth (1y) % EPS 1y % (Qtr) -4.97 76.34
FCF Growth (1y) % FCF 1y % (Qtr) -28.58 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.98 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.04 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.17 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 39.30 147.97
EBIT Margin % EBIT Margin % (Qtr) 37.88 155.41
EBT Margin % EBT Margin % (Qtr) 37.88 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 29.60 115.63