Financial Comparison: QCR (NASDAQ:QCRH) & Enterprise Financial Services (NASDAQ:EFSC)

Enterprise Financial Services (NASDAQ:EFSC) and QCR (NASDAQ:QCRH) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Institutional and Insider Ownership

72.2% of Enterprise Financial Services shares are owned by institutional investors. Comparatively, 70.0% of QCR shares are owned by institutional investors. 2.2% of Enterprise Financial Services shares are owned by insiders. Comparatively, 3.2% of QCR shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Enterprise Financial Services has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, QCR has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Dividends

Enterprise Financial Services pays an annual dividend of $1.36 per share and has a dividend yield of 2.1%. QCR pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. Enterprise Financial Services pays out 27.0% of its earnings in the form of a dividend. QCR pays out 4.7% 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. Enterprise Financial Services has increased its dividend for 11 consecutive years. Enterprise Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Enterprise Financial Services and QCR, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enterprise Financial Services	0	1	4	0	2.80
QCR	0	2	4	0	2.67

Enterprise Financial Services currently has a consensus price target of $70.00, suggesting a potential upside of 6.61%. QCR has a consensus price target of $108.75, suggesting a potential upside of 8.58%. Given QCR’s higher possible upside, analysts clearly believe QCR is more favorable than Enterprise Financial Services.

Valuation & Earnings

This table compares Enterprise Financial Services and QCR”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enterprise Financial Services	$1.00 billion	2.40	$201.37 million	$5.03	13.05
QCR	$387.04 million	4.27	$127.19 million	$8.46	11.84

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

Profitability

This table compares Enterprise Financial Services and QCR’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enterprise Financial Services	18.72%	9.73%	1.11%
QCR	22.86%	13.00%	1.50%

About Enterprise Financial Services

Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers primarily in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico. It provides checking, savings, money market accounts, and certificates of deposit. The company also provides commercial and industrial, commercial real estate, real estate construction and development, residential real estate, small business administration, agricultural, consumer, and other loan products. In addition, it offers treasury management and international trade services; tax credit brokerage services; life insurance premium and sponsor finance; tax credit related lending; other deposit accounts, such as community associations, property management, third party escrow, and trust services; treasury management product and services; customized solutions and products; cash management; fiduciary, investment management, and financial advisory services; and customer hedging products, including international banking, card services, and tax credit businesses. Further, the company provides online, device applications, text, and voice banking; remote deposit capture; internet banking, mobile banking, cash management, positive pay services, fraud detection and prevention, automated payables, check image, and statement and document imaging; and controlled disbursements, repurchase agreements, and sweep investment accounts. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.

About QCR

QCR Holdings, Inc., a multi-bank holding company, provides commercial and consumer banking, and trust and asset management services. The company’s deposit products include noninterest-bearing demand, interest-bearing demand, time, and brokered deposits. It also provides various commercial and retail lending/leasing, and investment services to corporations, partnerships, individuals, and government agencies. The company’s loan portfolio comprises loans to small and mid-sized businesses; business loans, including lines of credit for working capital and operational purposes; term loans for the acquisition of facilities, equipment, and other purposes; commercial and residential real estate loans; and installment and other consumer loans, such as home improvement, home equity, motor vehicle, and signature loans, as well as small personal credit lines. In addition, it engages in leasing of machinery and equipment to commercial and industrial businesses under direct financing lease contracts; and issuance of trust preferred securities. QCR Holdings, Inc. was incorporated in 1993 and is headquartered in Moline, Illinois.