Financial Comparison: Richmond Mutual Bancorporation (NASDAQ:RMBI) and CapStar Financial (NASDAQ:CSTR)

CapStar Financial (NASDAQ:CSTRGet Rating) and Richmond Mutual Bancorporation (NASDAQ:RMBIGet Rating) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, risk and valuation.

Profitability

This table compares CapStar Financial and Richmond Mutual Bancorporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CapStar Financial 34.83% 13.11% 1.54%
Richmond Mutual Bancorporation 22.31% 6.42% 0.94%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for CapStar Financial and Richmond Mutual Bancorporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CapStar Financial 0 0 4 0 3.00
Richmond Mutual Bancorporation 0 0 0 0 N/A

CapStar Financial presently has a consensus price target of $24.33, suggesting a potential upside of 19.75%. Given CapStar Financial’s higher possible upside, equities research analysts plainly believe CapStar Financial is more favorable than Richmond Mutual Bancorporation.

Insider & Institutional Ownership

43.1% of CapStar Financial shares are held by institutional investors. Comparatively, 18.9% of Richmond Mutual Bancorporation shares are held by institutional investors. 0.3% of CapStar Financial shares are held by company insiders. Comparatively, 5.9% of Richmond Mutual Bancorporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

CapStar Financial has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Richmond Mutual Bancorporation has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Earnings and Valuation

This table compares CapStar Financial and Richmond Mutual Bancorporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CapStar Financial $141.14 million 3.20 $48.68 million $2.17 9.36
Richmond Mutual Bancorporation $51.34 million 3.83 $11.15 million $1.01 15.79

CapStar Financial has higher revenue and earnings than Richmond Mutual Bancorporation. CapStar Financial is trading at a lower price-to-earnings ratio than Richmond Mutual Bancorporation, indicating that it is currently the more affordable of the two stocks.

Dividends

CapStar Financial pays an annual dividend of $0.24 per share and has a dividend yield of 1.2%. Richmond Mutual Bancorporation pays an annual dividend of $0.40 per share and has a dividend yield of 2.5%. CapStar Financial pays out 11.1% of its earnings in the form of a dividend. Richmond Mutual Bancorporation pays out 39.6% 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. CapStar Financial has increased its dividend for 2 consecutive years and Richmond Mutual Bancorporation has increased its dividend for 1 consecutive years.

Summary

CapStar Financial beats Richmond Mutual Bancorporation on 12 of the 16 factors compared between the two stocks.

About CapStar Financial (Get Rating)

CapStar Financial Holdings, Inc. operates as the bank holding company for CapStar Bank that provides banking services to consumer and corporate customers located primarily in Tennessee, the United States. Its deposit products and services include demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, certificates of deposit, and CDARS reciprocal products. The company also provides commercial and consumer real estate, construction and land development, commercial and industrial, consumer, PPP, and other loans. In addition, it offers mortgage banking products and services; private banking and wealth management services for the owners and operators of business clients and other high net worth individuals; and correspondent banking services to community banks. Further, the company provides telephone and online banking, direct deposit, mobile banking, safe deposit box, remote deposit, and cash management services for individuals, and small and medium sized businesses. CapStar Financial Holdings, Inc. was founded in 2007 and is headquartered in Nashville, Tennessee.

About Richmond Mutual Bancorporation (Get Rating)

Richmond Mutual Bancorporation, Inc. operates as a holding company for First Bank Richmond that provides various banking services. The company accepts various deposits, including savings deposit accounts, money market accounts NOW and demand accounts, and certificates of deposit. It also offers a range of lending products, such as multi-family and commercial real estate loans, commercial and industrial loans, construction and development loans, residential real estate loans, and consumer loans. In addition, the company engages in the lease financing business; and provision of fee-based financial services comprising trust and estate administration, investment management, retirement plan administration, and private banking services. It operates through 12 full service and one limited-service banking offices with seven full-service and one limited-service offices located in Indiana; five offices situated in Ohio; one full-service banking office and four other branch offices are located in Richmond, Indiana; two other offices in Cambridge City, Centerville, Richmond, and Shelbyville, Indiana; two offices in Sidney and Ohio; two offices in Piqua and one office in Troy, Ohio; and a loan production office in Columbus, Ohio. Richmond Mutual Bancorporation, Inc. was founded in 1887 and is headquartered in Richmond, Indiana.

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