Financial Contrast: South Plains Financial (NASDAQ:SPFI) versus Midland States Bancorp (NASDAQ:MSBI)

South Plains Financial (NASDAQ:SPFI) and Midland States Bancorp (NASDAQ:MSBI) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.

Risk and Volatility

South Plains Financial has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, Midland States Bancorp has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.

Profitability

This table compares South Plains Financial and Midland States Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South Plains Financial	20.79%	12.36%	1.37%
Midland States Bancorp	9.40%	13.32%	0.92%

Institutional and Insider Ownership

54.9% of South Plains Financial shares are held by institutional investors. Comparatively, 60.9% of Midland States Bancorp shares are held by institutional investors. 24.3% of South Plains Financial shares are held by company insiders. Comparatively, 8.6% of Midland States Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

South Plains Financial pays an annual dividend of $0.72 per share and has a dividend yield of 1.6%. Midland States Bancorp pays an annual dividend of $1.32 per share and has a dividend yield of 4.0%. South Plains Financial pays out 19.6% of its earnings in the form of a dividend. Midland States Bancorp pays out 84.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. South Plains Financial has raised its dividend for 5 consecutive years and Midland States Bancorp has raised its dividend for 1 consecutive years.

Analyst Recommendations

This is a summary of current ratings and target prices for South Plains Financial and Midland States Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Plains Financial	0	1	6	0	2.86
Midland States Bancorp	0	4	0	1	2.40

South Plains Financial currently has a consensus target price of $49.60, indicating a potential upside of 13.23%. Midland States Bancorp has a consensus target price of $31.12, indicating a potential downside of 4.82%. Given South Plains Financial’s stronger consensus rating and higher probable upside, equities research analysts clearly believe South Plains Financial is more favorable than Midland States Bancorp.

Valuation & Earnings

This table compares South Plains Financial and Midland States Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Plains Financial	$296.89 million	2.78	$58.47 million	$3.67	11.94
Midland States Bancorp	$476.05 million	1.43	-$124.28 million	$1.56	20.96

South Plains Financial has higher earnings, but lower revenue than Midland States Bancorp. South Plains Financial is trading at a lower price-to-earnings ratio than Midland States Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

South Plains Financial beats Midland States Bancorp on 11 of the 18 factors compared between the two stocks.

About South Plains Financial

South Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company was founded in 1941 and is headquartered in Lubbock, Texas.

About Midland States Bancorp

Midland States Bancorp, Inc. operates as a financial holding company for Midland States Bank that provides various banking products and services to individuals, businesses, municipalities, and other entities. It operates through Banking, Wealth Management, and Other segments. The company provides a range of financial products and services to consumers and businesses, including commercial loans to finance agricultural equipment and production; and commercial real estate loans for owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties, and assisted living facilities. In addition, it offers construction and land development loans, such as real estate investment properties and residential developments, and lesser extent loans; and residential real estate loans, which includes first and second mortgage loans, and home equity lines of credit consisting of loans secured by first or second mortgages on primarily owner occupied primary residences. The company also provides consumer installment loans for the purchase of cars, boats and other recreational vehicles, as well as for the purchase of major appliances and other home improvement projects; and commercial equipment leasing programs for manufacturing, construction, transportation, and healthcare industries. Further, it offers merchant services; deposit products, including checking, time, savings, money market, and certificates of deposit, as well as sweep accounts; letters of credit; and trust and wealth management services, such as financial and estate planning, trustee and custodial, investment management, tax, insurance, and business planning, corporate retirement plan consulting and administration, and retail brokerage services. The company was founded in 1881 and is headquartered in Effingham, Illinois.