Capstar Financial (NASDAQ: CSTR) and QCR (NASDAQ:QCRH) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Earnings & Valuation

This table compares Capstar Financial and QCR’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Capstar Financial $56.48 million 4.18 $9.09 million $0.35 59.34
QCR $137.51 million 4.33 $27.68 million $2.55 16.80

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

Risk & Volatility

Capstar Financial has a beta of 1.64, meaning that its stock price is 64% more volatile than the S&P 500. Comparatively, QCR has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.

Insider and Institutional Ownership

35.6% of Capstar Financial shares are owned by institutional investors. Comparatively, 59.7% of QCR shares are owned by institutional investors. 19.3% of Capstar Financial shares are owned by insiders. Comparatively, 8.8% of QCR shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Capstar Financial and QCR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Capstar Financial 7.05% 9.27% 0.95%
QCR 21.78% 11.78% 1.02%

Dividends

QCR pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Capstar Financial does not pay a dividend. QCR pays out 7.8% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations for Capstar Financial and QCR, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capstar Financial 0 3 0 0 2.00
QCR 0 0 4 0 3.00

Capstar Financial currently has a consensus target price of $18.00, suggesting a potential downside of 13.34%. QCR has a consensus target price of $54.00, suggesting a potential upside of 26.02%. Given QCR’s stronger consensus rating and higher possible upside, analysts clearly believe QCR is more favorable than Capstar Financial.

Summary

QCR beats Capstar Financial on 12 of the 16 factors compared between the two stocks.

About Capstar Financial

CapStar Financial Holdings, Inc. is a bank holding company. The Company operates primarily through its subsidiary, CapStar Bank. CapStar Bank is a commercial bank. The Company’s lines of business include commercial and industrial, commercial real estate, healthcare, correspondent banking, personal and private banking and wealth management, and mortgage banking. Its products and services include commercial and industrial loans to small and medium sized businesses, with a particular focus on businesses operating in the healthcare industry; commercial real estate loans; private banking and wealth management services for the owners and operators of business clients and other high net worth individuals, and correspondent banking services. As of June 30, 2016, the Company had seven locations, five of which are retail bank branches and two of which are mortgage origination offices.

About QCR

QCR Holdings, Inc. is a multi-bank holding company. The Company serves the Quad Cities, Cedar Rapids, Waterloo/Cedar Falls, Des Moines/Ankeny and Rockford communities through its banking subsidiaries, Quad City Bank and Trust Company (QCBT), Cedar Rapids Bank and Trust Company (CRBT), Community State Bank (CSB), Rockford Bank and Trust Company (RB&T), and Guaranty Bank and Trust Company, which provide full-service commercial and consumer banking and trust and asset management services. It is also engaged in direct financing lease contracts through m2 Lease Funds, LLC (m2), a subsidiary of QCBT. Its principal business consists of attracting deposits and investing those deposits in loans/leases and securities. The Company and its subsidiaries provide a range of commercial and retail lending/leasing, and investment services to corporations, partnerships, individuals and government agencies. It offers a range of loans, including one- to four-family residential loans and multi-family loans.

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