Head-To-Head Survey: MainStreet Bancshares (NASDAQ:MNSB) versus Coastal Financial (NASDAQ:CCB)

MainStreet Bancshares (NASDAQ:MNSB) and Coastal Financial (NASDAQ:CCB) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.

Insider & Institutional Ownership

52.3% of MainStreet Bancshares shares are owned by institutional investors. Comparatively, 59.2% of Coastal Financial shares are owned by institutional investors. 9.2% of MainStreet Bancshares shares are owned by insiders. Comparatively, 16.8% of Coastal Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for MainStreet Bancshares and Coastal Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MainStreet Bancshares	0	0	0	0	N/A
Coastal Financial	0	0	1	1	3.50

Coastal Financial has a consensus target price of $60.00, indicating a potential upside of 13.98%. Given Coastal Financial’s higher possible upside, analysts plainly believe Coastal Financial is more favorable than MainStreet Bancshares.

Volatility and Risk

MainStreet Bancshares has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Coastal Financial has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500.

Profitability

This table compares MainStreet Bancshares and Coastal Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MainStreet Bancshares	12.99%	9.06%	0.85%
Coastal Financial	6.07%	13.60%	1.06%

Valuation & Earnings

This table compares MainStreet Bancshares and Coastal Financial’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MainStreet Bancshares	$69.83 million	1.84	$26.58 million	$2.59	6.52
Coastal Financial	$397.64 million	1.78	$44.58 million	$2.86	18.41

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

Summary

Coastal Financial beats MainStreet Bancshares on 12 of the 14 factors compared between the two stocks.

About MainStreet Bancshares

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.

About Coastal Financial

Coastal Financial Corporation operates as the bank holding company for Coastal Community Bank that provides various banking products and services to small and medium-sized businesses, professionals, and individuals in the Puget Sound region in Washington. It accepts a range of deposit products, including demand and savings accounts, time deposits, and money market accounts. The company also offers commercial and industrial loans, such as term loans, commercial lines of credit, capital call lines working capital loans, equipment financing, borrowing base loans, small business administration loans, and other loan products; owner and non-owner-occupied real estate loans, and multi-family residential loans; construction, land, and land development loans; residential real estate loans; and consumer and other loans, including automobile, boat and recreational vehicle, and secured term loans, as well as personal lines of credit, including overdraft protection. In addition, it provides remote deposit capture, online and mobile banking, and direct and reciprocal deposit services; and debit cards. Further, the company offers business accounts and cash management services, including business checking and savings accounts, and treasury services, as well as Banking as a Service (BaaS), a platform that allows broker dealers and digital financial service providers to offer their customers banking services. Coastal Financial Corporation was founded in 1997 and is headquartered in Everett, Washington.