MidSouth Bancorp (NYSE:MSL) and CIT Group (NYSE:CIT) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Profitability

This table compares MidSouth Bancorp and CIT Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MidSouth Bancorp -16.04% 2.32% 0.26%
CIT Group 8.00% 7.58% 0.99%

Valuation & Earnings

This table compares MidSouth Bancorp and CIT Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MidSouth Bancorp $102.40 million 2.16 -$11.76 million ($0.27) -49.15
CIT Group $3.21 billion 1.49 $468.20 million $3.07 14.74

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

Volatility and Risk

MidSouth Bancorp has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500. Comparatively, CIT Group has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for MidSouth Bancorp and CIT Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MidSouth Bancorp 0 3 1 0 2.25
CIT Group 0 8 2 0 2.20

MidSouth Bancorp presently has a consensus price target of $15.00, suggesting a potential upside of 13.04%. CIT Group has a consensus price target of $54.21, suggesting a potential upside of 19.82%. Given CIT Group’s higher probable upside, analysts plainly believe CIT Group is more favorable than MidSouth Bancorp.

Institutional & Insider Ownership

63.4% of MidSouth Bancorp shares are owned by institutional investors. 12.8% of MidSouth Bancorp shares are owned by insiders. Comparatively, 0.3% of CIT Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

MidSouth Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. CIT Group pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. MidSouth Bancorp pays out -14.8% of its earnings in the form of a dividend. CIT Group pays out 32.6% 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

CIT Group beats MidSouth Bancorp on 10 of the 16 factors compared between the two stocks.

MidSouth Bancorp Company Profile

MidSouth Bancorp, Inc., a bank holding company, through its subsidiary MidSouth Bank, N.A., provides various community banking products and services to commercial and retail customers in the United States. The company offers various deposit products, including interest-bearing and noninterest-bearing checking accounts, money market, savings accounts, investment accounts, and NOW account deposits, as well as time deposits, such as certificates of deposits; and commercial and industrial, commercial real estate, and consumer loans, as well as other loans secured by real estate. It also provides cash management services; and electronic banking services comprising remote deposit capturing services, Internet banking, and debit and credit cards. As of February 27, 2018, the company had 48 offices located in Louisiana and Texas, as well as a network of approximately 55,000 surcharge-free ATMs. MidSouth Bancorp, Inc. was founded in 1984 and is headquartered in Lafayette, Louisiana.

CIT Group Company Profile

CIT Group Inc. operates as the bank holding company for CIT Bank, National Association that provides banking and related services to commercial and individual customers. The company operates through three segments: Commercial Banking, Consumer Banking, and Non-Strategic Portfolios (NSP). The Commercial Banking segment offers lending, leasing, and other financial and advisory services primarily to small and middle-market companies; factoring, receivables management products, and secured supply chain financing; and equipment leasing and secured financing to railroads and non-rail companies. The Consumer Banking segment provides mortgage loans and deposits. It accepts deposits, including checking and savings accounts, money market accounts, and certificates of deposit; and offers residential mortgage and small business administration loans, and reverse mortgages, as well as fiduciary services. The NSP segment provides equipment financing, secured lending, and leasing and advisory services to small and middle-market businesses. The company also offers online banking services. It operates through a network of 70 branches located in southern California. CIT Group Inc. was founded in 1908 and is headquartered in Livingston, New Jersey.

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