MidWestOne Financial Group (NASDAQ:MOFG) versus Merchants Bancorp (NASDAQ:MBIN) Financial Contrast

Merchants Bancorp (NASDAQ:MBIN) and MidWestOne Financial Group (NASDAQ:MOFG) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Dividends

Merchants Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 0.9%. MidWestOne Financial Group pays an annual dividend of $0.97 per share and has a dividend yield of 2.0%. Merchants Bancorp pays out 8.8% 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. Merchants Bancorp has raised its dividend for 8 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Merchants Bancorp	19.80%	15.29%	1.34%
MidWestOne Financial Group	16.66%	10.22%	0.96%

Risk & Volatility

Merchants Bancorp has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500. Comparatively, MidWestOne Financial Group has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Merchants Bancorp and MidWestOne Financial Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Merchants Bancorp	0	3	2	0	2.40
MidWestOne Financial Group	0	2	1	0	2.33

Merchants Bancorp currently has a consensus target price of $55.25, indicating a potential upside of 12.82%. MidWestOne Financial Group has a consensus target price of $50.00, indicating a potential upside of 1.40%. Given Merchants Bancorp’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Merchants Bancorp is more favorable than MidWestOne Financial Group.

Insider & Institutional Ownership

24.6% of Merchants Bancorp shares are owned by institutional investors. Comparatively, 65.4% of MidWestOne Financial Group shares are owned by institutional investors. 44.9% of Merchants Bancorp shares are owned by company insiders. Comparatively, 2.5% of MidWestOne Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Merchants Bancorp and MidWestOne Financial Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Merchants Bancorp	$1.37 billion	1.65	$218.77 million	$4.98	9.83
MidWestOne Financial Group	$238.84 million	4.26	-$60.29 million	$2.81	17.55

Merchants Bancorp has higher revenue and earnings than MidWestOne Financial Group. Merchants Bancorp 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

Merchants Bancorp beats MidWestOne Financial Group on 13 of the 17 factors compared between the two stocks.

About Merchants Bancorp

Merchants Bancorp operates as the diversified bank holding company in the United States. It operates through three segments: Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The Multi-family Mortgage Banking segment engages in the mortgage banking, which originates and services government sponsored mortgages, including bridge financing products to refinance, acquire, or reposition multi-family housing projects, and construction lending for multi-family and healthcare facilities. This segment also offers customized loan products for need-based skilled nursing facilities, such as independent living, assisted living, and memory care; and tax credit equity syndicator service. The Mortgage Warehousing segment funds agency eligible residential loans, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, which includes retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and small business administration lending. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.

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.