Head-To-Head Contrast: First National (NASDAQ:FXNC) versus MidWestOne Financial Group (NASDAQ:MOFG)

First National (NASDAQ:FXNCGet Rating) and MidWestOne Financial Group (NASDAQ:MOFGGet Rating) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Insider and Institutional Ownership

38.0% of First National shares are held by institutional investors. Comparatively, 65.0% of MidWestOne Financial Group shares are held by institutional investors. 15.7% of First National shares are held by insiders. Comparatively, 2.6% of MidWestOne Financial Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares First National and MidWestOne Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First National 22.93% 10.86% 0.90%
MidWestOne Financial Group 28.49% 11.80% 1.05%

Risk and Volatility

First National has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500. Comparatively, MidWestOne Financial Group has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.

Dividends

First National pays an annual dividend of $0.56 per share and has a dividend yield of 3.0%. MidWestOne Financial Group pays an annual dividend of $0.95 per share and has a dividend yield of 3.2%. First National pays out 27.7% of its earnings in the form of a dividend. MidWestOne Financial Group pays out 24.4% 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. First National has increased its dividend for 7 consecutive years and MidWestOne Financial Group has increased its dividend for 12 consecutive years. MidWestOne Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares First National and MidWestOne Financial Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First National $47.32 million 2.44 $10.36 million $2.02 9.14
MidWestOne Financial Group $219.22 million 2.10 $69.49 million $3.90 7.51

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

Analyst Ratings

This is a breakdown of current recommendations for First National and MidWestOne Financial Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First National 0 1 0 0 2.00
MidWestOne Financial Group 0 0 0 0 N/A

First National presently has a consensus price target of $51.00, indicating a potential upside of 176.27%. Given First National’s higher probable upside, research analysts clearly believe First National is more favorable than MidWestOne Financial Group.

Summary

MidWestOne Financial Group beats First National on 11 of the 15 factors compared between the two stocks.

About First National (Get Rating)

First National Corporation operates as the bank holding company for First Bank that provides various commercial banking services to small and medium-sized businesses, individuals, estates, local governmental entities, and non-profit organizations in Virginia. The company's deposit products include checking, savings, money market, and individual retirement accounts, as well as certificates of deposit and treasury management solutions. Its loan products comprise construction loans, including residential, land acquisition, and development loans; 1-4 family residential real estate loans; and commercial real estate loans that are secured by commercial real estate, including multi-family residential buildings, office and retail buildings, hotels, industrial buildings, and religious facilities. The company's loan products also include commercial and industrial loans that are secured by business assets, such as accounts receivable, equipment, and inventory; home equity loans; and secured and unsecured consumer loans, such as lines of credit, automobile loans, deposit account loans, and installment and demand loans. In addition, it provides wealth management services, including estate planning, investment management of assets, trustee under an agreement, trustee under a will, and estate settlement. Further, the company offers title insurance and investment services; and holds other real estate owned and office sites, as well as provides internet and mobile banking, remote deposit capture, and other traditional banking services. It serves customers through 20 bank branch offices, a loan production office, and a customer service center, as well as through a network of ATMs. The company was founded in 1907 and is headquartered in Strasburg, Virginia.

About MidWestOne Financial Group (Get Rating)

MidWestOne Financial Group, Inc. operates as the bank holding company for MidWestOne Bank that provides commercial and retail banking products and services to individuals, businesses, governmental units, and institutional customers. It offers deposit products, such as noninterest bearing and interest-bearing demand deposit accounts, interest checking accounts, savings accounts, money market accounts, certificates of deposit, and time deposits. The company also provides commercial and industrial, commercial and residential real estate, agricultural, and credit card loans, as well as consumer loans, such as secured and unsecured personal, and automobile loans. In addition, it offers various trust and investment services, including administering estates, personal trusts, and conservatorships, as well as property management, farm management, investment advisory, retail securities brokerage, and financial planning and custodial services, as well as investment-related services, including securities trading, mutual funds sales, fixed and variable annuities, tax-exempted, and conventional unit trusts. Further, the company provides other products and services comprising treasury management, debit cards, automated teller machines, online and mobile banking, and safe deposit boxes. It offers its products and services primarily through a network of 56 banking offices located in central and eastern Iowa, the Minneapolis/St. Paul metropolitan area of Minnesota, southwestern Wisconsin, southwestern Florida, and Denver, Colorado. MidWestOne Financial Group, Inc. was incorporated in 1983 and is headquartered in Iowa City, Iowa.

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