Bank of Commerce (NASDAQ: MBCN) and Middlefield Banc (NASDAQ:MBCN) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Risk and Volatility

Bank of Commerce has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500. Comparatively, Middlefield Banc has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500.

Profitability

This table compares Bank of Commerce and Middlefield Banc’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of Commerce 18.19% 9.54% 0.97%
Middlefield Banc 20.64% 8.55% 0.92%

Analyst Ratings

This is a breakdown of recent ratings for Bank of Commerce and Middlefield Banc, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of Commerce 0 0 0 0 N/A
Middlefield Banc 0 1 1 0 2.50

Middlefield Banc has a consensus target price of $52.50, indicating a potential upside of 8.92%. Given Middlefield Banc’s higher probable upside, analysts clearly believe Middlefield Banc is more favorable than Bank of Commerce.

Earnings & Valuation

This table compares Bank of Commerce and Middlefield Banc’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of Commerce $50.77 million 4.16 $7.34 million $0.64 20.23
Middlefield Banc $48.85 million 3.19 $9.45 million $3.28 14.70

Middlefield Banc has lower revenue, but higher earnings than Bank of Commerce. Middlefield Banc is trading at a lower price-to-earnings ratio than Bank of Commerce, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

56.0% of Bank of Commerce shares are owned by institutional investors. Comparatively, 31.4% of Middlefield Banc shares are owned by institutional investors. 6.4% of Bank of Commerce shares are owned by company insiders. Comparatively, 7.0% of Middlefield Banc shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Bank of Commerce pays an annual dividend of $0.16 per share and has a dividend yield of 1.2%. Middlefield Banc pays an annual dividend of $1.12 per share and has a dividend yield of 2.3%. Bank of Commerce pays out 25.0% of its earnings in the form of a dividend. Middlefield Banc pays out 34.1% 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.

Summary

Bank of Commerce beats Middlefield Banc on 8 of the 15 factors compared between the two stocks.

About Bank of Commerce

Bank of Commerce Holdings operates as the bank holding company for Redding Bank of Commerce that provides a range of financial services and products for retail customers and small to medium sized businesses in California. The company's deposit products include checking, interest-bearing checking, money market, and savings accounts, as well as certificates of deposit. The company also offers commercial loans, commercial real estate loans, residential mortgages, consumer loans, construction loans, term loans, small business administration loans, and home equity loans. In addition, it provides sweep arrangements, safe deposit boxes, collection services, electronic banking services, payroll processing, and ATM and point of sale services. As of January 19, 2018, the company operated nine offices located in northern California. Bank of Commerce Holdings is headquartered in Sacramento, California.

About Middlefield Banc

Middlefield Banc Corp. operates as the bank holding company for The Middlefield Banking Company that provides various commercial banking services to small and medium-sized businesses, professionals, small business owners, and retail customers in northeastern and central Ohio. It accepts checking, savings, negotiable order of withdrawal, and money market accounts, as well as time certificates of deposit and IRA accounts. The company offers operational, working capital, term business, residential construction, professional, residential, and mortgage loans; loans to finance capital purchases; selected guaranteed or subsidized loan programs for small businesses; consumer installment loans to purchase automobiles and boats, as well as for home improvement and other personal expenditures; and agricultural loans. It also provides safe deposit facilities, travelers' and official checks, money orders, and ATM services; online banking and bill payment services to individuals; and online cash management services to business customers. In addition, the company resolves and disposes troubled assets in Ohio. As of January 23, 2018, it operated 14 full-service banking centers; an LPL financial brokerage office serving Beachwood, Chardon, Cortland, Dublin, Garrettsville, Mantua, Middlefield, Newbury, Orwell, Solon, Sunbury, Twinsburg, and Westerville; and a loan production office in Mentor, Ohio. Middlefield Banc Corp. was founded in 1901 and is headquartered in Middlefield, Ohio.

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