Enterprise Financial Services (NASDAQ: EFSC – Get Rating) and MainStreet Bancshares (NASDAQ: MNSB – Get Rating) are both small cap finance companies, but which business is superior? We’ll compare the two companies based on earnings strength, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.
Risk and Volatility
Enterprise Financial Services has a beta of 1.21, suggesting its stock price is 21% more volatile than the S&P 500. By comparison, MainStreet Bancshares has a beta of 0.49, suggesting its stock price is 51 % less volatile than the S&P 500.
This is a breakdown of the current recommendations and price targets for Enterprise Financial Services and MainStreet Bancshares, as reported by MarketBeat.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
|Business Financial Services||0||0||2||0||3.00|
Enterprise Financial Services currently has a consensus price target of $58.00, suggesting a potential upside of 27.25%. MainStreet Bancshares has a consensus price target of $26.00, suggesting a potential upside of 11.35%. Given Enterprise Financial Services’ likely higher upside, stock analysts clearly believe that Enterprise Financial Services is more favorable than MainStreet Bancshares.
Enterprise Financial Services pays an annual dividend of $0.84 per share and has a dividend yield of 1.8%. MainStreet Bancshares pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. Enterprise Financial Services pays 21.5% of its profits as a dividend. MainStreet Bancshares pays 7.6% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Enterprise Financial Services has increased its dividend for 5 consecutive years. Enterprise Financial Services is clearly the best dividend stock, given its higher yield and longer history of dividend growth.
This table compares the net margins, return on equity and return on assets of Enterprise Financial Services and MainStreet Bancshares.
|Net margins||Return on equity||return on assets|
|Business Financial Services||29.50%||13.08%||1.42%|
Institutional and Insider Ownership
64.8% of Enterprise Financial Services shares are held by institutional investors. By comparison, 38.9% of MainStreet Bancshares shares are held by institutional investors. 5.9% of Enterprise Financial Services shares are held by insiders. By comparison, 7.3% of MainStreet Bancshares shares are held by insiders. Strong institutional ownership indicates that hedge funds, large fund managers, and endowments believe a stock will outperform the market over the long term.
Valuation and benefits
This table compares the revenue, earnings per share (EPS) and valuation of Enterprise Financial Services and MainStreet Bancshares.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|Business Financial Services||$450.97 million||3.81||$133.05 million||$3.90||11.69|
|MainStreet Bancshares||$70.31 million||2.54||$22.17 million||$2.64||8.84|
Enterprise Financial Services has higher revenue and profit than MainStreet Bancshares. MainStreet Bancshares trades at a lower price-to-earnings ratio than corporate financial services, indicating that it is currently the more affordable of the two stocks.
Enterprise Financial Services beats MainStreet Bancshares on 12 out of 16 factors compared between the two stocks.
Corporate Financial Services Company Profile (Get a rating)
Enterprise Financial Services Corp operates as a financial holding company for Enterprise Bank & Trust which offers banking and wealth management services to individuals and businesses. The company offers checking, savings and money market accounts, as well as certificates of deposit. It also offers commercial and industrial real estate, commercial, construction and land development, residential real estate, agricultural and consumer loans. In addition, the company offers cash management and international trade services; tax credit brokerage services consisting of the acquisition of tax credits and the sale of these tax credits to clients; and financial and estate planning, investment management and trust services to businesses, individuals, institutions, pension plans and not-for-profit organizations. In addition, it offers fiduciary, financial advisory and merchant processing services; and debit and credit cards. In addition, the company provides international banking, insurance, internet and mobile banking, remote deposit collection, positive payment, fraud detection and prevention, automated payments, imaging checks and imaging of statements and documents; and cash management products, controlled disbursements, repurchase agreements and scanning investment accounts. It operates banking sites and administrative offices in market areas of Arizona, California, Kansas, Missouri, Nevada and New Mexico, as well as a network of SBA loan origination offices and of filing production offices in various states. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.
MainStreet Bancshares Company Profile (Get an assessment)
MainStreet Bancshares, Inc. is a holding company that provides banking solutions through MainStreet Bank. It offers products and services such as checks, deposits, loans, credit cards, mortgages and savings. The company was founded on March 28, 2003 and is based in Fairfax, Virginia.
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