MainStreet Bank (NASDAQ:MNSB – Get Free Report) and Business First Bancshares (NASDAQ:BFST – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.
Institutional and Insider Ownership
52.3% of MainStreet Bank shares are held by institutional investors. Comparatively, 47.4% of Business First Bancshares shares are held by institutional investors. 9.3% of MainStreet Bank shares are held by insiders. Comparatively, 5.7% of Business First Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares MainStreet Bank and Business First Bancshares”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| MainStreet Bank | $137.87 million | 1.27 | -$9.98 million | ($1.46) | -15.61 |
| Business First Bancshares | $458.96 million | 1.64 | $65.11 million | $2.51 | 10.13 |
Business First Bancshares has higher revenue and earnings than MainStreet Bank. MainStreet Bank is trading at a lower price-to-earnings ratio than Business First Bancshares, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares MainStreet Bank and Business First Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| MainStreet Bank | -6.34% | 3.72% | 0.32% |
| Business First Bancshares | 15.47% | 11.21% | 1.06% |
Volatility & Risk
MainStreet Bank has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, Business First Bancshares has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for MainStreet Bank and Business First Bancshares, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| MainStreet Bank | 0 | 0 | 0 | 0 | 0.00 |
| Business First Bancshares | 0 | 0 | 4 | 0 | 3.00 |
Business First Bancshares has a consensus price target of $30.75, suggesting a potential upside of 20.97%. Given Business First Bancshares’ stronger consensus rating and higher possible upside, analysts plainly believe Business First Bancshares is more favorable than MainStreet Bank.
Dividends
MainStreet Bank pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. Business First Bancshares pays an annual dividend of $0.56 per share and has a dividend yield of 2.2%. MainStreet Bank pays out -27.4% of its earnings in the form of a dividend. Business First Bancshares pays out 22.3% 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. Business First Bancshares has raised its dividend for 2 consecutive years. Business First Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Business First Bancshares beats MainStreet Bank on 14 of the 17 factors compared between the two stocks.
About MainStreet Bank
MainStreet Bancshares, Inc. operates as the bank holding company for MainStreet Bank that provides various banking products and services for individuals, small to medium-sized businesses, and professional service organizations. The company offers demand, NOW, money market, savings, and sweep accounts, as well as certificates of deposit; business and consumer checking, interest-bearing checking, business account analysis, and other depository services; and cash management, wire transfer, check imaging, bill pay, remote deposit capture, and courier services. It also provides commercial loans, include government contract receivables, plant and equipment, general working capital, contract administration, and acquisition loans; commercial real estate, real estate construction, and residential real estate loans; and consumer loans comprising term loans and overdraft protection, as well as debit and credit cards. In addition, the company offers deposit insurance solutions; remote deposit of checks; and internet bill payment, online cash management, and online and mobile banking services. It operates in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington D.C., as well as automated teller machines. The company was incorporated in 2003 and is headquartered in Fairfax, Virginia.
About Business First Bancshares
Business First Bancshares, Inc. operates as the bank holding company for b1BANK that provides various banking products and services in Louisiana and Texas. It offers various deposit products and services, including checking, demand, money market, time, and savings accounts; and certificates of deposits, remote deposit capture, and direct deposit services. The company also provides commercial and industrial loans, such as working capital, term, equipment financing, asset acquisition, expansion and development, borrowing base, and other loan products, as well as commercial lines of credit, accounts receivable factoring, agricultural financing, and letters of credit; construction and development loans; commercial real estate loans; residential real estate loans comprising first and second lien 1-4 family mortgage loans, and home equity lines of credit; and consumer loans, including secured and unsecured installment, and term loans. In addition, it offers wealth management products, including mutual funds, annuities, individual retirement accounts, and other financial products, as well as other fiduciary and private banking products and services. Further, the company provides a range of other financial services comprising debit and credit cards, treasury and cash management, merchant, automated clearing house, lock-box, receivables factoring, correspondent banking, and other treasury services, as well as employee and payroll benefits solutions; and drive-through banking facilities, automated teller machines, night depository, personalized checks, electronic funds transfer, domestic and foreign wire transfer, traveler's checks, vault, loan and deposit sweep accounts, online and mobile banking, e-statements, and bank-by-mail services. Business First Bancshares, Inc. was founded in 2006 and is headquartered in Baton Rouge, Louisiana.
Receive News & Ratings for MainStreet Bank Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for MainStreet Bank and related companies with MarketBeat.com's FREE daily email newsletter.
