Merchants Bancorp (NASDAQ:MBIN – Get Rating) and Eagle Financial Services (OTCMKTS:EFSI – Get Rating) are both small cap finance companies, but which stock is superior? We will compare the two companies based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.
Risk and Volatility
Merchants Bancorp has a beta of 1.02, suggesting its stock price is 2% more volatile than the S&P 500. In comparison, Eagle Financial Services has a beta of 0.65, suggesting its stock price is 35 % less volatile than the S&P 500.
This table compares the net margins, return on equity and return on assets of Merchants Bancorp and Eagle Financial Services.
|Net margins||Return on equity||return on assets|
|Eagle Financial Services||20.41%||10.19%||0.89%|
Benefits and evaluation
This table compares the gross revenue, earnings per share and valuation of Merchants Bancorp and Eagle Financial Services.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|Merchant’s Bank||$469.22 million||2.37||$227.10 million||$5.33||4.81|
|Eagle Financial Services||$54.00 million||2.29||$11.02 million||$3.20||11.08|
Merchants Bancorp has higher revenue and profit than Eagle Financial Services. Merchants Bancorp trades at a lower price-to-earnings ratio than Eagle Financial Services, indicating that it is currently the more affordable of the two stocks.
Merchants Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.1%. Eagle Financial Services pays an annual dividend of $1.12 per share and has a dividend yield of 3.2%. Merchants Bancorp pays 5.3% of its profits as a dividend. Eagle Financial Services pays 35.0% of its earnings 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. Merchants Bancorp has increased its dividend for 5 consecutive years.
Insider and Institutional Ownership
15.2% of Merchants Bancorp shares are held by institutional investors. By comparison, 1.3% of Eagle Financial Services shares are held by institutional investors. 42.0% of the shares of Merchants Bancorp are held by insiders of the company. By comparison, 22.4% of Eagle Financial Services shares are held by company insiders. Strong institutional ownership indicates that large money managers, endowments, and hedge funds believe a stock will outperform the market over the long term.
This is a breakdown of recent recommendations for Merchants Bancorp and Eagle Financial Services, as provided by MarketBeat.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
|Eagle Financial Services||0||0||0||0||N / A|
Merchants Bancorp currently has a consensus price target of $36.67, suggesting a potential upside of 42.89%. Given Merchants Bancorp’s possible higher upside, stock analysts clearly believe that Merchants Bancorp is more favorable than Eagle Financial Services.
Merchants Bancorp beats Eagle Financial Services on 14 out of 16 factors compared between the two stocks.
About Bancorp Merchants (Get a rating)
Merchants Bancorp operates as a diversified bank holding company in the United States. The Company operates through the Multi-Family Mortgage Banking, Mortgage Warehousing and Banking Services segments. The Multifamily Mortgage segment originates and manages government-sponsored mortgage loans for multifamily and healthcare facilities. This segment also offers customized loan products for independent living, assisted living, memory care and skilled nursing projects; and operates as a syndicator of tax credit and low-income housing debt funds. The Mortgage Warehousing segment finances agency-eligible residential loans, including origination, purchase and sale in the secondary market, as well as commercial loans to non-custodial financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, such as various types of deposit products, as well as multifamily and bridge construction, commercial real estate, commercial and industrial, agricultural, residential mortgage and lending to the consumption of the products. This segment also provides single-family mortgages; construction, bridge and land financing; senior home equity lines of credit; and small business loan products and services. Merchants Bancorp was founded in 1990 and is based in Carmel, Indiana.
About Eagle Financial Services (Get a rating)
Eagle Financial Services, Inc. operates as a bank holding company, which provides retail and commercial banking, demand, savings and term deposits, and consumer, mortgage and business loans. It offers telephone banking, internet banking and mobile banking to its customers. The company was founded in 1991 and is based in Berryville, Virginia.
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