Head-To-Head Comparison: MidWestOne Financial Group (NASDAQ:MOFG) and Carter Bankshares (NASDAQ:CARE)

Carter Bankshares (NASDAQ:CARE) and MidWestOne Financial Group (NASDAQ:MOFG) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Dividends

Carter Bankshares pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. MidWestOne Financial Group pays an annual dividend of $0.97 per share and has a dividend yield of 2.0%. Carter Bankshares pays out 6.9% 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.

Volatility and Risk

Carter Bankshares has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, MidWestOne Financial Group has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Earnings and Valuation

This table compares Carter Bankshares 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
Carter Bankshares	$214.28 million	3.11	$31.00 million	$5.81	5.17
MidWestOne Financial Group	$238.84 million	4.26	-$60.29 million	$2.81	17.55

Carter Bankshares has higher earnings, but lower revenue than MidWestOne Financial Group. Carter Bankshares 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.

Insider & Institutional Ownership

41.5% of Carter Bankshares shares are held by institutional investors. Comparatively, 65.4% of MidWestOne Financial Group shares are held by institutional investors. 2.4% of Carter Bankshares shares are held by company insiders. Comparatively, 2.5% of MidWestOne Financial Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Carter Bankshares and MidWestOne Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carter Bankshares	36.79%	7.46%	0.73%
MidWestOne Financial Group	16.66%	10.22%	0.96%

Analyst Ratings

This is a summary of current ratings and target prices for Carter Bankshares and MidWestOne Financial Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carter Bankshares	0	4	1	0	2.20
MidWestOne Financial Group	0	2	1	0	2.33

Carter Bankshares currently has a consensus price target of $30.75, indicating a potential upside of 2.40%. MidWestOne Financial Group has a consensus price target of $50.00, indicating a potential upside of 1.40%. Given Carter Bankshares’ higher possible upside, equities analysts clearly believe Carter Bankshares is more favorable than MidWestOne Financial Group.

Summary

MidWestOne Financial Group beats Carter Bankshares on 10 of the 15 factors compared between the two stocks.

About Carter Bankshares

Carter Bankshares, Inc. operates as the bank holding company for Carter Bank & Trust that provides various banking products and services in the United States. It accepts various deposit products, including checking, savings, retirement, and money market accounts, as well as certificates of deposits. The company also offers commercial loans comprising secured and unsecured loans; consumer loans, such as secured and unsecured loans for financing automobiles, home improvements, education, overdraft protection, and personal investments, as well as residential mortgages; real estate construction, acquisition, commercial, and industrial loans; home equity lines of credit; and credit cards, as well as originates and holds fixed and variable rate mortgage loans. In addition, it provides other banking services that include safe deposit boxes, direct deposit of payroll, and social security checks; online banking products, including online and mobile banking, online account opening, bill pay, e-statement, mobile deposit, digital wallet, and ATM services; title insurance and other financial institution-related products and services; and treasury and corporate cash management services. Carter Bankshares, Inc. was founded in 1974 and is headquartered in Martinsville, Virginia.

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.