Contrasting Midland States Bancorp (NASDAQ:MSBI) and QNB (OTCMKTS:QNBC)

QNB (OTCMKTS:QNBC) and Midland States Bancorp (NASDAQ:MSBI) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Earnings and Valuation

This table compares QNB and Midland States Bancorp’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
QNB	$73.92 million	1.15	$9.48 million	$2.19	10.62
Midland States Bancorp	$470.89 million	0.99	$75.46 million	$2.94	7.40

Midland States Bancorp has higher revenue and earnings than QNB. Midland States Bancorp is trading at a lower price-to-earnings ratio than QNB, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

QNB has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500. Comparatively, Midland States Bancorp has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500.

Institutional and Insider Ownership

0.7% of QNB shares are owned by institutional investors. Comparatively, 60.9% of Midland States Bancorp shares are owned by institutional investors. 16.0% of QNB shares are owned by insiders. Comparatively, 5.6% of Midland States Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares QNB and Midland States Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
QNB	10.12%	9.38%	0.47%
Midland States Bancorp	15.17%	11.50%	0.97%

Dividends

QNB pays an annual dividend of $1.48 per share and has a dividend yield of 6.4%. Midland States Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 5.7%. QNB pays out 67.6% of its earnings in the form of a dividend. Midland States Bancorp pays out 42.2% 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.

Analyst Ratings

This is a summary of current ratings and target prices for QNB and Midland States Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
QNB	0	0	0	0	N/A
Midland States Bancorp	0	4	0	0	2.00

Midland States Bancorp has a consensus price target of $25.63, indicating a potential upside of 17.71%. Given Midland States Bancorp’s higher possible upside, analysts plainly believe Midland States Bancorp is more favorable than QNB.

Summary

Midland States Bancorp beats QNB on 10 of the 14 factors compared between the two stocks.

About QNB

QNB Corp. operates as the bank holding company for QNB Bank that engages in the provision of commercial and retail banking products, and retail brokerage services. It offers various deposit products, which include demand and savings accounts, such as money market, interest-bearing demand, club, traditional statement savings, and online savings accounts; and time deposits comprising certificates of deposit and individual retirement accounts. The company also provides commercial and industrial loans, commercial and residential real estate loans, construction and land development loans, indirect lease financing, 1-4 family residential mortgage loans, home equity loans and lines of credit, and consumer loans. In addition, it offers retail brokerage and advisory services; credit cards and insurance products; merchant services; ATM and debit card services; and internet and mobile-banking, electronic bill pay, and remote deposit capture services. The company serves other community banks, thrift institutions, credit unions and other non-bank financial organizations, such as mutual fund companies, insurance companies, and brokerage companies. QNB Corp. was founded in 1877 and is based in Quakertown, Pennsylvania.

About Midland States Bancorp

Midland States Bancorp, Inc. operates as a financial holding company for Midland States Bank that provides various banking products and services to individuals, businesses, municipalities, and other entities. It operates through Banking, Wealth Management, and Other segments. The company provides a range of financial products and services to consumers and businesses, including commercial loans to finance agricultural equipment and production; and commercial real estate loans for owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties, and assisted living facilities. In addition, it offers construction and land development loans, such as real estate investment properties and residential developments, and lesser extent loans; and residential real estate loans, which includes first and second mortgage loans, and home equity lines of credit consisting of loans secured by first or second mortgages on primarily owner occupied primary residences. The company also provides consumer installment loans for the purchase of cars, boats and other recreational vehicles, as well as for the purchase of major appliances and other home improvement projects; and commercial equipment leasing programs for manufacturing, construction, transportation, and healthcare industries. Further, it offers merchant services; deposit products, including checking, time, savings, money market, and certificates of deposit, as well as sweep accounts; letters of credit; and trust and wealth management services, such as financial and estate planning, trustee and custodial, investment management, tax, insurance, and business planning, corporate retirement plan consulting and administration, and retail brokerage services. The company was founded in 1881 and is headquartered in Effingham, Illinois.