Head-To-Head Survey: Mercantile Bank (NASDAQ:MBWM) vs. Ohio Valley Banc (NASDAQ:OVBC)

Mercantile Bank (NASDAQ:MBWM) and Ohio Valley Banc (NASDAQ:OVBC) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, analyst recommendations, valuation, profitability, earnings and dividends.

Earnings and Valuation

This table compares Mercantile Bank and Ohio Valley Banc”s top-line revenue, earnings per share 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
Ohio Valley Banc	$88.93 million	2.00	$11.00 million	$2.94	12.82

Mercantile Bank has higher revenue and earnings than Ohio Valley Banc. Mercantile Bank is trading at a lower price-to-earnings ratio than Ohio Valley Banc, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings for Mercantile Bank and Ohio Valley Banc, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercantile Bank	0	2	3	0	2.60
Ohio Valley Banc	0	0	0	0	0.00

Mercantile Bank currently has a consensus price target of $55.25, indicating a potential upside of 20.74%. Given Mercantile Bank’s stronger consensus rating and higher probable upside, equities analysts clearly believe Mercantile Bank is more favorable than Ohio Valley Banc.

Profitability

This table compares Mercantile Bank and Ohio Valley Banc’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%
Ohio Valley Banc	14.81%	8.95%	0.92%

Risk & Volatility

Mercantile Bank has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Ohio Valley Banc has a beta of 0.1, meaning that its stock price is 90% less volatile than the S&P 500.

Institutional and Insider Ownership

58.6% of Mercantile Bank shares are owned by institutional investors. Comparatively, 22.1% of Ohio Valley Banc shares are owned by institutional investors. 3.2% of Mercantile Bank shares are owned by insiders. Comparatively, 7.1% of Ohio Valley Banc shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Mercantile Bank pays an annual dividend of $1.52 per share and has a dividend yield of 3.3%. Ohio Valley Banc pays an annual dividend of $0.92 per share and has a dividend yield of 2.4%. Mercantile Bank pays out 30.2% of its earnings in the form of a dividend. Ohio Valley Banc pays out 31.3% 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. Mercantile Bank has increased its dividend for 14 consecutive years and Ohio Valley Banc has increased its dividend for 3 consecutive years. Mercantile Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Mercantile Bank beats Ohio Valley Banc on 15 of the 17 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 Ohio Valley Banc

Ohio Valley Banc Corp. operates as the bank holding company for The Ohio Valley Bank Company that provides commercial and consumer banking products and services. The company operates in two segments, Banking and Consumer Finance. It accepts various deposit products, including checking, savings, time, and money market accounts, as well as individual retirement accounts, demand deposits, NOW accounts, and certificates of deposit. The company also provides various residential real estate loans, including one-to four-family residential mortgages; commercial loans for securing equipment, inventory, stock, commercial real estate, and rental property; and consumer loans secured by automobiles, mobile homes, recreational vehicles, and other personal property, as well as personal loans, unsecured credit card receivables, floor plan and student loans, and construction loans. In addition, it offers safe deposit box, wire transfer, credit card, home equity loans, and Internet banking services; and financial management online services, such as cash management and news updates related to repossession auctions, current rates, and general bank news. Further, the company provides automatic teller machines (ATMs), consumer finance, seasonal tax preparation, commercial property, and various liability insurance services, as well as trust and online-only consumer direct mortgage services. The company owns and operates ATMs, including off-site ATMs. It operates offices in Ohio and West Virginia. The company was founded in 1872 and is based in Gallipolis, Ohio.