Analyzing Enterprise Financial Services (NASDAQ:EFSC) and Middlefield Banc (NASDAQ:MBCN)

Enterprise Financial Services (NASDAQ:EFSC) and Middlefield Banc (NASDAQ:MBCN) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enterprise Financial Services	0	0	3	0	3.00
Middlefield Banc	0	2	0	0	2.00

Enterprise Financial Services presently has a consensus price target of $67.33, suggesting a potential upside of 18.32%. Middlefield Banc has a consensus price target of $28.50, suggesting a potential upside of 9.95%. Given Enterprise Financial Services’ stronger consensus rating and higher possible upside, analysts clearly believe Enterprise Financial Services is more favorable than Middlefield Banc.

Profitability

This table compares Enterprise Financial Services and Middlefield Banc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enterprise Financial Services	20.12%	10.94%	1.26%
Middlefield Banc	14.31%	7.47%	0.85%

Dividends

Enterprise Financial Services pays an annual dividend of $1.16 per share and has a dividend yield of 2.0%. Middlefield Banc pays an annual dividend of $0.84 per share and has a dividend yield of 3.2%. Enterprise Financial Services pays out 24.0% of its earnings in the form of a dividend. Middlefield Banc pays out 43.7% 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 11 consecutive years.

Earnings and Valuation

This table compares Enterprise Financial Services and Middlefield Banc”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enterprise Financial Services	$531.45 million	3.96	$185.27 million	$4.84	11.76
Middlefield Banc	$67.89 million	3.08	$15.52 million	$1.92	13.50

Enterprise Financial Services has higher revenue and earnings than Middlefield Banc. Enterprise Financial Services is trading at a lower price-to-earnings ratio than Middlefield Banc, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

72.2% of Enterprise Financial Services shares are owned by institutional investors. Comparatively, 31.7% of Middlefield Banc shares are owned by institutional investors. 2.3% of Enterprise Financial Services shares are owned by insiders. Comparatively, 3.8% of Middlefield Banc shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Enterprise Financial Services has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, Middlefield Banc has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Summary

Enterprise Financial Services beats Middlefield Banc on 14 of the 17 factors compared between the two stocks.

About Enterprise Financial Services

Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers primarily in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico. It provides checking, savings, money market accounts, and certificates of deposit. The company also provides commercial and industrial, commercial real estate, real estate construction and development, residential real estate, small business administration, agricultural, consumer, and other loan products. In addition, it offers treasury management and international trade services; tax credit brokerage services; life insurance premium and sponsor finance; tax credit related lending; other deposit accounts, such as community associations, property management, third party escrow, and trust services; treasury management product and services; customized solutions and products; cash management; fiduciary, investment management, and financial advisory services; and customer hedging products, including international banking, card services, and tax credit businesses. Further, the company provides online, device applications, text, and voice banking; remote deposit capture; internet banking, mobile banking, cash management, positive pay services, fraud detection and prevention, automated payables, check image, and statement and document imaging; and controlled disbursements, repurchase agreements, and sweep investment accounts. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.

About Middlefield Banc

Middlefield Banc Corp. operates as the bank holding company for The Middlefield Banking Company that provides various commercial banking services to small and medium-sized businesses, professionals, small business owners, and retail customers in northeastern and central Ohio. It offers checking, savings, negotiable order of withdrawal accounts, money market accounts, time certificates of deposit, commercial loans, real estate loans, various consumer loans, safe deposit facilities, and travelers' checks. The company also provides operational and working capital, term business, residential construction, professional, and residential and mortgage loans, as well as consumer installment loans for home improvements, automobiles, boats, and other personal expenditures; loans to finance capital purchases; selected guaranteed or subsidized loan programs for small businesses; and agricultural loans. In addition, the company resolves and disposes troubled assets in Ohio. Further, it offers official checks, money orders, and ATM services, as well as IRA accounts; online banking and bill payment services to individuals; and online cash management services to business customers. Middlefield Banc Corp. was founded in 1901 and is headquartered in Middlefield, Ohio.