Comparing Metropolitan Bank (NYSE:MCB) & MainStreet Bank (NASDAQ:MNSB)

Metropolitan Bank (NYSE:MCB) and MainStreet Bank (NASDAQ:MNSB) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Metropolitan Bank and MainStreet Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Metropolitan Bank	12.46%	8.71%	0.82%
MainStreet Bank	-3.32%	6.05%	0.52%

Analyst Recommendations

This is a summary of current ratings and price targets for Metropolitan Bank and MainStreet Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Metropolitan Bank	0	2	3	0	2.60
MainStreet Bank	2	0	0	0	1.00

Metropolitan Bank presently has a consensus price target of $81.00, indicating a potential upside of 4.72%. Given Metropolitan Bank’s stronger consensus rating and higher possible upside, analysts clearly believe Metropolitan Bank is more favorable than MainStreet Bank.

Risk & Volatility

Metropolitan Bank has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, MainStreet Bank has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.

Valuation & Earnings

This table compares Metropolitan Bank and MainStreet Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Metropolitan Bank	$492.21 million	1.62	$66.69 million	$5.76	13.43
MainStreet Bank	$137.87 million	1.11	-$9.98 million	($0.90)	-22.02

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

Dividends

Metropolitan Bank pays an annual dividend of $0.60 per share and has a dividend yield of 0.8%. MainStreet Bank pays an annual dividend of $0.40 per share and has a dividend yield of 2.0%. Metropolitan Bank pays out 10.4% of its earnings in the form of a dividend. MainStreet Bank pays out -44.4% 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. MainStreet Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

79.8% of Metropolitan Bank shares are owned by institutional investors. Comparatively, 52.3% of MainStreet Bank shares are owned by institutional investors. 6.1% of Metropolitan Bank shares are owned by insiders. Comparatively, 9.3% of MainStreet Bank shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Metropolitan Bank beats MainStreet Bank on 13 of the 16 factors compared between the two stocks.

About Metropolitan Bank

Metropolitan Bank Holding Corp. operates as the bank holding company for Metropolitan Commercial Bank that provides a range of business, commercial, and retail banking products and services to small businesses, middle-market enterprises, public entities, and individuals in the New York metropolitan area. The company offers checking, savings, term deposit, money market, demand deposit, and other interest-bearing transaction accounts. It also provides lending products, including commercial real estate, multi-family, construction, and one-to four-family real estate loans; commercial and industrial loans; consumer loans; acquisition and renovation loans; loans to refinance or return borrower equity; loans on owner-occupied properties; working capital lines of credit; trade finance and letters of credit; and term loans. In addition, the company offers cash management services, as well as online and mobile banking, ACH, remote deposit capture, and debit cards. The company was formerly known as Metbank Holding Corp. and changed its name to Metropolitan Bank Holding Corp. in January 2007. Metropolitan Bank Holding Corp. was incorporated in 1997 and is headquartered in New York, New York.

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.