Enterprise Financial Services (NASDAQ:EFSC – Get Free Report) and QNB (OTCMKTS:QNBC – Get Free Report) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.
Dividends
Enterprise Financial Services pays an annual dividend of $1.12 per share and has a dividend yield of 1.9%. QNB pays an annual dividend of $1.48 per share and has a dividend yield of 4.5%. Enterprise Financial Services pays out 23.7% of its earnings in the form of a dividend. QNB pays out 56.9% 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.
Profitability
This table compares Enterprise Financial Services and QNB’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Enterprise Financial Services | 19.73% | 10.81% | 1.24% |
| QNB | 11.00% | 9.86% | 0.54% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Enterprise Financial Services | 0 | 0 | 3 | 0 | 3.00 |
| QNB | 0 | 0 | 0 | 0 | 0.00 |
Enterprise Financial Services currently has a consensus price target of $58.33, indicating a potential downside of 3.08%. Given Enterprise Financial Services’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Enterprise Financial Services is more favorable than QNB.
Institutional & Insider Ownership
72.2% of Enterprise Financial Services shares are held by institutional investors. Comparatively, 0.7% of QNB shares are held by institutional investors. 2.3% of Enterprise Financial Services shares are held by company insiders. Comparatively, 16.0% of QNB shares are held by company 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.
Valuation & Earnings
This table compares Enterprise Financial Services and QNB”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 | $527.63 million | 4.24 | $194.06 million | $4.72 | 12.75 |
| QNB | $73.92 million | 1.65 | $9.48 million | $2.60 | 12.69 |
Enterprise Financial Services has higher revenue and earnings than QNB. QNB 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.
Volatility and Risk
Enterprise Financial Services has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, QNB has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500.
Summary
Enterprise Financial Services beats QNB on 14 of the 16 factors compared between the two stocks.
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 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.
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