Head to Head Survey: MidWestOne Financial Group (NASDAQ:MOFG) & MainStreet Bancshares (NASDAQ:MNSB)

MidWestOne Financial Group (NASDAQ:MOFG) and MainStreet Bancshares (NASDAQ:MNSB) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Risk & Volatility

MidWestOne Financial Group has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500. Comparatively, MainStreet Bancshares has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500.

Dividends

MidWestOne Financial Group pays an annual dividend of $0.97 per share and has a dividend yield of 4.1%. MainStreet Bancshares pays an annual dividend of $0.40 per share and has a dividend yield of 2.2%. MidWestOne Financial Group pays out 73.5% of its earnings in the form of a dividend. MainStreet Bancshares pays out 12.3% 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. MidWestOne Financial Group has increased its dividend for 13 consecutive years. MidWestOne Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

65.4% of MidWestOne Financial Group shares are owned by institutional investors. Comparatively, 52.3% of MainStreet Bancshares shares are owned by institutional investors. 2.8% of MidWestOne Financial Group shares are owned by company insiders. Comparatively, 8.5% of MainStreet Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares MidWestOne Financial Group and MainStreet Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MidWestOne Financial Group	7.78%	7.12%	0.56%
MainStreet Bancshares	20.81%	14.34%	1.32%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for MidWestOne Financial Group and MainStreet Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MidWestOne Financial Group	0	3	0	0	2.00
MainStreet Bancshares	0	1	0	0	2.00

MidWestOne Financial Group currently has a consensus target price of $25.00, indicating a potential upside of 6.66%. MainStreet Bancshares has a consensus target price of $24.00, indicating a potential upside of 32.16%. Given MainStreet Bancshares’ higher probable upside, analysts clearly believe MainStreet Bancshares is more favorable than MidWestOne Financial Group.

Valuation & Earnings

This table compares MidWestOne Financial Group and MainStreet Bancshares’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MidWestOne Financial Group	$162.60 million	2.27	$20.86 million	$1.32	17.76
MainStreet Bancshares	$127.76 million	1.08	$26.58 million	$3.24	5.60

MainStreet Bancshares has lower revenue, but higher earnings than MidWestOne Financial Group. MainStreet Bancshares is trading at a lower price-to-earnings ratio than MidWestOne Financial Group, indicating that it is currently the more affordable of the two stocks.

Summary

MainStreet Bancshares beats MidWestOne Financial Group on 8 of the 15 factors compared between the two stocks.

About MidWestOne Financial Group

MidWestOne Financial Group, Inc. operates as the bank holding company for MidWestOne Bank that provides commercial and retail banking products and services to individuals, businesses, governmental units, and institutional customers. It offers range of deposit products, including noninterest bearing and interest bearing demand deposits, savings, money market, and time deposits accounts. The company also provides commercial, real estate, agricultural, credit card, and consumer loans; and financing arrangements, such as brokered deposits, term debt, subordinated debt, and equity. In addition, it offers trust and investment services comprising administering estates, trusts, and conservatorships; property and farm management, investment advisory, retail securities brokerage, financial planning, and custodial services; and licensed brokers services. Further, the company provides online and mobile banking, debit cards, automated teller machines, and safe deposit boxes. MidWestOne Financial Group, Inc. was founded in 1934 and is headquartered in Iowa City, Iowa.

About MainStreet Bancshares

MainStreet Bancshares, Inc. operates as the bank holding company for MainStreet Bank that provides various banking products and services for individuals, small to medium-sized businesses, and professional service organizations. The company offers demand, NOW, money market, savings, and sweep accounts, as well as certificates of deposit; business and consumer checking, interest-bearing checking, business account analysis, and other depository services; and cash management, wire transfer, check imaging, bill pay, remote deposit capture, and courier services. It also provides commercial loans, include government contract receivables, plant and equipment, general working capital, contract administration, and acquisition loans; commercial real estate, real estate construction, and residential real estate loans; and consumer loans comprising term loans and overdraft protection, as well as debit and credit cards. In addition, the company offers deposit insurance solutions; remote deposit of checks; and internet bill payment, online cash management, and online and mobile banking services. It operates in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington D.C., as well as automated teller machines. The company was incorporated in 2003 and is headquartered in Fairfax, Virginia.