Comparing Mercantile Bank (NASDAQ:MBWM) and Equitable Financial (OTCMKTS:EQFN)

Mercantile Bank (NASDAQ:MBWM) and Equitable Financial (OTCMKTS:EQFN) 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.

Risk & Volatility

Mercantile Bank has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Equitable Financial has a beta of 0.1, meaning that its share price is 90% less volatile than the S&P 500.

Valuation and Earnings

This table compares Mercantile Bank and Equitable Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mercantile Bank	$361.89 million	2.05	$79.59 million	$5.04	9.08
Equitable Financial	$31.33 million	1.18	$2.71 million	N/A	N/A

Mercantile Bank has higher revenue and earnings than Equitable Financial.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Mercantile Bank and Equitable Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercantile Bank	0	2	3	0	2.60
Equitable Financial	0	0	0	0	0.00

Mercantile Bank presently has a consensus price target of $55.25, suggesting a potential upside of 20.74%. Given Mercantile Bank’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Mercantile Bank is more favorable than Equitable Financial.

Institutional & Insider Ownership

58.6% of Mercantile Bank shares are held by institutional investors. Comparatively, 7.2% of Equitable Financial shares are held by institutional investors. 3.2% of Mercantile Bank shares are held by insiders. Comparatively, 11.3% of Equitable Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Mercantile Bank and Equitable Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mercantile Bank	22.11%	13.52%	1.34%
Equitable Financial	9.82%	10.12%	0.97%

Summary

Mercantile Bank beats Equitable Financial on 11 of the 13 factors compared between the two stocks.

About Mercantile Bank

Mercantile Bank Corporation operates as the bank holding company for Mercantile Bank of Michigan that provides commercial and retail banking services to small- to medium-sized businesses and individuals in the United States. It accepts various deposit products, including checking, savings, and term certificate accounts; time deposits; and certificates of deposit. The company also provides commercial and industrial loans; vacant land, land development, and residential construction loans; owner and non-owner occupied real estate loans; multi-family and residential rental property loans; single-family residential real estate loans; home equity line of credit programs; and consumer loans, such as new and used automobile and boat loans, and credit cards, as well as overdraft protection services; and residential mortgage and instalment loans. In addition, it offers courier services and safe deposit facilities; and insurance products, such as private passenger automobile, homeowners, personal inland marine, boat owners, recreational vehicle, dwelling fire, umbrella policies, small business, and life insurance products. The company was incorporated in 1997 and is headquartered in Grand Rapids, Michigan.

About Equitable Financial

Equitable Financial Corp. operates as the holding company for Equitable Bank that provides various banking products and services in Nebraska, the United States. The company offers checking and savings accounts; recorder checks; online and mobile banking; remote deposit capture; voice banking; credit card processing; debit and gift cards; and safe deposit boxes. It also provides home, home equity, auto, personal, real estate and construction, operating lines of credit, small business administration, and agricultural loans, as well as equipment financing. In addition, the company offers foreign currency and exchanges; financial planning; wealth management; investment advisory; and retirement services. It operates through branches located in Grand Island, North Platte, and Omaha. The company was founded in 1882 and is headquartered in Grand Island, Nebraska.