Midland States Bancorp (NASDAQ: MSBI) and Pacific Premier Bancorp (NASDAQ:PPBI) are both small-cap financials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, institutional ownership, profitability and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Midland States Bancorp and Pacific Premier Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Midland States Bancorp 0 0 1 0 3.00
Pacific Premier Bancorp 0 1 4 0 2.80

Midland States Bancorp presently has a consensus price target of $37.00, indicating a potential upside of 16.57%. Pacific Premier Bancorp has a consensus price target of $43.00, indicating a potential upside of 20.96%. Given Pacific Premier Bancorp’s higher possible upside, analysts plainly believe Pacific Premier Bancorp is more favorable than Midland States Bancorp.

Dividends

Midland States Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.5%. Pacific Premier Bancorp does not pay a dividend. Midland States Bancorp pays out 41.0% of its earnings in the form of a dividend.

Institutional & Insider Ownership

46.6% of Midland States Bancorp shares are held by institutional investors. Comparatively, 82.4% of Pacific Premier Bancorp shares are held by institutional investors. 14.9% of Midland States Bancorp shares are held by company insiders. Comparatively, 4.6% of Pacific Premier Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Midland States Bancorp and Pacific Premier Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Midland States Bancorp 8.23% 3.59% 0.36%
Pacific Premier Bancorp 19.85% 9.42% 1.20%

Volatility and Risk

Midland States Bancorp has a beta of 2.38, suggesting that its stock price is 138% more volatile than the S&P 500. Comparatively, Pacific Premier Bancorp has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Earnings & Valuation

This table compares Midland States Bancorp and Pacific Premier Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Midland States Bancorp $178.81 million 3.39 $37.24 million $1.95 16.28
Pacific Premier Bancorp $199.61 million 7.13 $58.08 million $1.45 24.52

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

Summary

Pacific Premier Bancorp beats Midland States Bancorp on 11 of the 16 factors compared between the two stocks.

About Midland States Bancorp

Midland States Bancorp, Inc. is a diversified financial holding company. The Company’s banking subsidiary is Midland States Bank (the Bank). The Company’s principal business activity has been lending to and accepting deposits from individuals, businesses, municipalities and other entities. The Company’s segments include Banking, which provides a range of financial products and services to consumers and businesses, including loan products; commercial equipment leasing; mortgage loan sales and servicing; letters of credit; various types of deposit products, including checking, savings and time deposit accounts; merchant services, and corporate treasury management services; Commercial Federal Housing Administration (FHA) Origination and Servicing, which provides for the origination and servicing of government sponsored mortgages for multifamily and healthcare facilities, and Other, which includes the operating results of the Company and its wealth management business unit.

About Pacific Premier Bancorp

Pacific Premier Bancorp, Inc. is a bank holding company. The Company’s subsidiary, Pacific Premier Bank (the Bank), is a California state-chartered commercial bank. The Company’s principal business is attracting deposits from small and middle market businesses and consumers and investing those deposits together with funds generated from operations and borrowings, primarily in commercial business loans and various types of commercial real estate (CRE) loans. The Company provides banking services within its targeted markets in California to businesses, including the owners and employees of those businesses, professionals, real estate investors and non-profit organizations. Additionally, it provides certain banking services nationwide. It also provides customized cash management, electronic banking services and credit facilities to Home Owners Associations (HOA) and HOA management companies nationwide. It provides the United States Small Business Administration (SBA) loans nationwide.

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