Merchants Bancorp (NASDAQ:MBIN) and Eagle Bancorp (NASDAQ:EGBN) Head-To-Head Survey

Merchants Bancorp (NASDAQ:MBIN) and Eagle Bancorp (NASDAQ:EGBN) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Dividends

Merchants Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 0.8%. Eagle Bancorp pays an annual dividend of $1.80 per share and has a dividend yield of 8.1%. Merchants Bancorp pays out 5.7% of its earnings in the form of a dividend. Eagle Bancorp pays out 71.7% 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.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Merchants Bancorp and Eagle Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Merchants Bancorp	0	1	2	0	2.67
Eagle Bancorp	0	2	0	0	2.00

Merchants Bancorp currently has a consensus price target of $56.00, indicating a potential upside of 26.18%. Eagle Bancorp has a consensus price target of $22.50, indicating a potential upside of 1.81%. Given Merchants Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Merchants Bancorp is more favorable than Eagle Bancorp.

Valuation and Earnings

This table compares Merchants Bancorp and Eagle Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Merchants Bancorp	$636.04 million	3.03	$279.23 million	$6.37	6.97
Eagle Bancorp	$307.92 million	2.17	$100.53 million	$2.51	8.80

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

Insider and Institutional Ownership

24.6% of Merchants Bancorp shares are owned by institutional investors. Comparatively, 78.0% of Eagle Bancorp shares are owned by institutional investors. 39.7% of Merchants Bancorp shares are owned by company insiders. Comparatively, 3.1% of Eagle Bancorp shares are owned 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.

Volatility & Risk

Merchants Bancorp has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Eagle Bancorp has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.

Profitability

This table compares Merchants Bancorp and Eagle Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Merchants Bancorp	23.14%	25.54%	1.86%
Eagle Bancorp	-5.28%	5.50%	0.59%

Summary

Merchants Bancorp beats Eagle Bancorp on 13 of the 16 factors compared between the two stocks.

About Merchants Bancorp

Merchants Bancorp operates as the diversified bank holding company in the United States. It operates through three segments: Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The Multi-family Mortgage Banking segment engages in the mortgage banking, which originates and services government sponsored mortgages, including bridge financing products to refinance, acquire, or reposition multi-family housing projects, and construction lending for multi-family and healthcare facilities. This segment also offers customized loan products for need-based skilled nursing facilities, such as independent living, assisted living, and memory care; and tax credit equity syndicator service. The Mortgage Warehousing segment funds agency eligible residential loans, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, which includes retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and small business administration lending. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.

About Eagle Bancorp

Eagle Bancorp, Inc. operates as the bank holding company for EagleBank that provides commercial and consumer banking services primarily in the United States. The company also offers various commercial and consumer lending products comprising commercial loans for working capital, equipment purchases, real estate lines of credit, and government contract financing; asset based lending and accounts receivable financing; construction and commercial real estate loans; business equipment financing; consumer home equity lines of credit, personal lines of credit, and term loans; consumer installment loans, such as auto and personal loans; personal credit cards; and residential mortgage loans. In addition, it provides online and mobile banking services; checking and saving accounts; and other deposit services, including cash management services, business sweep accounts, lock boxes, remote deposit captures, account reconciliation services, merchant card services, safety deposit boxes, and automated clearing house origination, as well as after-hours depositories and ATM services. Further, the company offers insurance products and services through a referral program; and treasury management services. The company serves sole proprietors, small and medium-sized businesses, partnerships, corporations, and non-profit organizations and associations, as well as investors. Eagle Bancorp, Inc. was incorporated in 1997 and is headquartered in Bethesda, Maryland.