Critical Survey: Enterprise Financial Services (NASDAQ:EFSC) & MainStreet Bancshares (NASDAQ:MNSB)


Enterprise Financial Services (NASDAQ:EFSC – Get Rating) and MainStreet Bancshares (NASDAQ:MNSB – Get Rating) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.

Risk and Volatility

Enterprise Financial Services has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, MainStreet Bancshares has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Enterprise Financial Services and MainStreet Bancshares, as reported by MarketBeat.

Sell ​​Ratings Hold Ratings Buy Ratings Strong Buy Ratings RatingScore
Enterprise Financial Services 0 0 2 0 3.00
MainStreet Bancshares 0 0 1 0 3.00

Enterprise Financial Services presently 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’ higher probable upside, equity analysts plainly believe Enterprise Financial Services is more favorable than MainStreet Bancshares.

Dividends

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 out 21.5% of its earnings in the form of a dividend. MainStreet Bancshares pays out 7.6% 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 5 consecutive years. Enterprise Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Enterprise Financial Services and MainStreet Bancshares’ net margins, return on equity and return on assets.

net margins Return on Equity Return on Assets
Enterprise Financial Services 29.50% 13.08% 1.42%
MainStreet Bancshares 31.54% 14.41% 1.31%

Institutional and Insider Ownership

64.8% of Enterprise Financial Services shares are owned by institutional investors. Comparatively, 38.9% of MainStreet Bancshares shares are owned by institutional investors. 5.9% of Enterprise Financial Services shares are owned by insiders. Comparatively, 7.3% of MainStreet Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Enterprise Financial Services and MainStreet Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio net income Earnings Per Share Price/Earnings Ratio
Enterprise 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 earnings than MainStreet Bancshares. MainStreet Bancshares is trading at a lower price-to-earnings ratio than Enterprise Financial Services, indicating that it is currently the most affordable of the two stocks.

Summary

Enterprise Financial Services beats MainStreet Bancshares on 12 of the 16 factors compared between the two stocks.

Enterprise Financial Services Company Profile (Get Rating)

Enterprise Financial Services Corp operates as the financial holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers. The company offers checking, savings, and money market accounts, and certificates of deposit. It also provides commercial and industrial, commercial real estate, construction and land development, residential real estate, agricultural, and consumer loans. In addition, the company offers treasury management and international trade services; tax credit brokerage services consisting of the acquisition of tax credits and sale of these tax credits to clients; and financial and estate planning, investment management, and trust services to businesses, individuals, institutions, retirement plans, and non-profit organizations. Further, it offers fiduciary, financial advisory, and merchant processing services; and debit and credit cards. Additionally, the company provides international banking, insurance, internet and mobile banking, remote deposit capture, positive pay, fraud detection and prevention, automated payable, check imaging, and statement and document imaging services; and cash management products, controlled disbursements, repurchase agreements, and sweep investment accounts. It operates banking locations and administrative offices in Arizona, California, Kansas, Missouri, Nevada, and New Mexico market areas, as well as a network of SBA loan production offices and deposit production offices in various states. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.

MainStreet Bancshares Company Profile (Get Rating)

MainStreet Bancshares, Inc. is a holding company, which engages in the provision of banking solutions through MainStreet Bank. It offers products and services such as checking, deposits, loans, credit cards, mortgages, and savings. The company was founded on March 28, 2003 and is headquartered in Fairfax, VA.



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