Ames National (NASDAQ:ATLO) versus Enterprise Financial Services (NASDAQ:EFSC) Critical Contrast

Enterprise Financial Services (NASDAQ:EFSC) and Ames National (NASDAQ:ATLO) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, analyst recommendations, valuation, profitability, earnings and dividends.

Profitability

This table compares Enterprise Financial Services and Ames National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enterprise Financial Services	19.81%	10.35%	1.19%
Ames National	21.63%	10.65%	1.02%

Risk & Volatility

Enterprise Financial Services has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, Ames National has a beta of 0.3, meaning that its stock price is 70% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Enterprise Financial Services and Ames National, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enterprise Financial Services	0	1	4	0	2.80
Ames National	0	2	1	0	2.33

Enterprise Financial Services currently has a consensus price target of $68.50, indicating a potential upside of 4.10%. Ames National has a consensus price target of $31.00, indicating a potential upside of 4.98%. Given Ames National’s higher probable upside, analysts clearly believe Ames National is more favorable than Enterprise Financial Services.

Earnings & Valuation

This table compares Enterprise Financial Services and Ames National”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enterprise Financial Services	$1.00 billion	2.40	$201.37 million	$5.30	12.42
Ames National	$98.26 million	2.66	$19.03 million	$2.42	12.20

Enterprise Financial Services has higher revenue and earnings than Ames National. Ames National is trading at a lower price-to-earnings ratio than Enterprise Financial Services, indicating that it is currently the more affordable of the two stocks.

Dividends

Enterprise Financial Services pays an annual dividend of $1.36 per share and has a dividend yield of 2.1%. Ames National pays an annual dividend of $0.96 per share and has a dividend yield of 3.3%. Enterprise Financial Services pays out 25.7% of its earnings in the form of a dividend. Ames National pays out 39.7% 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. Enterprise Financial Services has increased its dividend for 11 consecutive years.

Institutional and Insider Ownership

72.2% of Enterprise Financial Services shares are owned by institutional investors. Comparatively, 26.5% of Ames National shares are owned by institutional investors. 2.2% of Enterprise Financial Services shares are owned by insiders. Comparatively, 2.3% of Ames National shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Enterprise Financial Services beats Ames National on 11 of the 17 factors compared between the two stocks.

About Enterprise Financial Services

Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers primarily in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico. It provides checking, savings, money market accounts, and certificates of deposit. The company also provides commercial and industrial, commercial real estate, real estate construction and development, residential real estate, small business administration, agricultural, consumer, and other loan products. In addition, it offers treasury management and international trade services; tax credit brokerage services; life insurance premium and sponsor finance; tax credit related lending; other deposit accounts, such as community associations, property management, third party escrow, and trust services; treasury management product and services; customized solutions and products; cash management; fiduciary, investment management, and financial advisory services; and customer hedging products, including international banking, card services, and tax credit businesses. Further, the company provides online, device applications, text, and voice banking; remote deposit capture; internet banking, mobile banking, cash management, positive pay services, fraud detection and prevention, automated payables, check image, and statement and document imaging; and controlled disbursements, repurchase agreements, and sweep investment accounts. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.

About Ames National

Ames National Corporation operates as a multi-bank holding company that provides banking products and services primarily in Boone, Clarke, Hancock, Marshall, Polk, Story, and Union counties in central, north central, and south-central Iowa. The company accepts various deposit products, including checking and savings accounts; and time deposits, such as money market accounts and certificates of deposit. It also provides loans, such as short-term and medium-term commercial and agricultural real estate, residential real estate loans, equipment, vehicle, and home improvement loans; consumer loans to finance consumer purchases, such as automobiles, trucks, recreational vehicles, household furnishings, boats, personal loans, and lines of credit; agricultural and business operating loans and lines of credit; and originates mortgage loans for sale into the secondary market. In addition, the company offers cash management, merchant credit card processing, safe deposit box, wire transfer, direct deposit, and automated/video teller machine access services; and automatic drafts for various accounts, as well as wealth management services. Further, it provides farm management, investment, and custodial services for individuals, businesses, and non-profit organizations; and online, mobile, and private banking services. Ames National Corporation was incorporated in 1903 and is headquartered in Ames, Iowa.