MidWestOne Financial Group (NASDAQ:MOFG) versus Bank Of Montreal (NYSE:BMO) Financial Review

Bank Of Montreal (NYSE:BMO) and MidWestOne Financial Group (NASDAQ:MOFG) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Risk & Volatility

Bank Of Montreal has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, MidWestOne Financial Group has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Institutional and Insider Ownership

45.8% of Bank Of Montreal shares are owned by institutional investors. Comparatively, 65.4% of MidWestOne Financial Group shares are owned by institutional investors. 1.0% of Bank Of Montreal shares are owned by insiders. Comparatively, 2.5% of MidWestOne Financial Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Bank Of Montreal pays an annual dividend of $4.81 per share and has a dividend yield of 2.7%. MidWestOne Financial Group pays an annual dividend of $0.97 per share and has a dividend yield of 2.0%. Bank Of Montreal pays out 54.3% of its earnings in the form of a dividend. MidWestOne Financial Group pays out 34.5% 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. Bank Of Montreal has increased its dividend for 4 consecutive years. Bank Of Montreal is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Bank Of Montreal and MidWestOne Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank Of Montreal	1	6	5	0	2.33
MidWestOne Financial Group	0	2	1	0	2.33

Bank Of Montreal presently has a consensus target price of $163.00, indicating a potential downside of 6.91%. MidWestOne Financial Group has a consensus target price of $50.00, indicating a potential upside of 1.40%. Given MidWestOne Financial Group’s higher probable upside, analysts clearly believe MidWestOne Financial Group is more favorable than Bank Of Montreal.

Profitability

This table compares Bank Of Montreal and MidWestOne Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank Of Montreal	11.72%	13.60%	0.71%
MidWestOne Financial Group	16.66%	10.22%	0.96%

Valuation and Earnings

This table compares Bank Of Montreal and MidWestOne Financial Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank Of Montreal	$55.92 billion	2.18	$6.22 billion	$8.86	19.76
MidWestOne Financial Group	$238.84 million	4.26	-$60.29 million	$2.81	17.55

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

About Bank Of Montreal

Bank of Montreal provides diversified financial services primarily in North America. It operates through Canadian P&C, U.S P&C, BMO Wealth Management, and BMO Capital Markets segments. The company’s personal banking products and services include deposits, mortgages, home lending, consumer credit, small business lending, credit cards, cash management, financial and investment advice, and other banking services; and commercial banking products and services comprise various of financing options and treasury and payment solutions, as well as risk management products. It also offers investing, banking, and wealth management advisory; digital investing services; financial solutions for individuals, families, and businesses; provides investment management services to institutional, retail, and high net worth investors; and diversified insurance, and wealth and pension de-risking solutions. In addition, the company provides individual life, critical illness and annuity products, as well as segregated funds, and group creditor and travel insurance to customers; debt and equity capital-raising, loan origination and syndication, balance sheet management, treasury management, mergers and acquisitions advice, restructurings and recapitalizations, trade finance, and risk mitigation services, as well as a range of banking and other operating services. Further, the company offers research and access to financial markets for institutional, corporate and retail clients through an integrated suite of sales and trading solutions related to debt, foreign exchange, interest rates, credit, equities, securitization, and commodities; provides new product development and origination services, as well as risk management and advisory services for hedging strategies, including in interest rates, foreign exchange rates and commodities prices; and funding and liquidity management services. The company was founded in 1817 and is headquartered in Montreal, Canada.

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.