West Bancorporation (NASDAQ:WTBA) and First Mid-Illinois Bancshares (NASDAQ:FMBH) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.
Valuation & Earnings
This table compares West Bancorporation and First Mid-Illinois Bancshares’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|West Bancorporation||$92.54 million||3.68||$28.51 million||$1.73||12.02|
|First Mid-Illinois Bancshares||$159.98 million||3.37||$36.60 million||$2.73||11.82|
This is a summary of current recommendations for West Bancorporation and First Mid-Illinois Bancshares, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Mid-Illinois Bancshares||0||1||1||0||2.50|
West Bancorporation currently has a consensus price target of $27.00, indicating a potential upside of 29.81%. First Mid-Illinois Bancshares has a consensus price target of $40.50, indicating a potential upside of 25.50%. Given West Bancorporation’s stronger consensus rating and higher possible upside, analysts plainly believe West Bancorporation is more favorable than First Mid-Illinois Bancshares.
Risk and Volatility
West Bancorporation has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, First Mid-Illinois Bancshares has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500.
West Bancorporation pays an annual dividend of $0.84 per share and has a dividend yield of 4.0%. First Mid-Illinois Bancshares pays an annual dividend of $0.72 per share and has a dividend yield of 2.2%. West Bancorporation pays out 48.6% of its earnings in the form of a dividend. First Mid-Illinois Bancshares pays out 26.4% 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. West Bancorporation has increased its dividend for 6 consecutive years and First Mid-Illinois Bancshares has increased its dividend for 2 consecutive years. West Bancorporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares West Bancorporation and First Mid-Illinois Bancshares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Mid-Illinois Bancshares||22.04%||9.61%||1.22%|
Institutional and Insider Ownership
37.1% of West Bancorporation shares are held by institutional investors. Comparatively, 29.7% of First Mid-Illinois Bancshares shares are held by institutional investors. 3.1% of West Bancorporation shares are held by company insiders. Comparatively, 13.6% of First Mid-Illinois Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
West Bancorporation beats First Mid-Illinois Bancshares on 10 of the 15 factors compared between the two stocks.
West Bancorporation Company Profile
West Bancorporation, Inc. operates as the financial holding company for West Bank that provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers various deposit products, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers trust services, including the administration of estates, conservatorships, personal trusts, and agency accounts. Further, the company provides Internet and mobile banking services; treasury management services comprising cash management, client-generated automated clearing house transaction, remote deposit, and fraud protection services; and merchant credit card processing services and corporate credit cards. It has eight offices in the Des Moines area; one office in Coralville; and one office in Rochester, Minnesota. West Bancorporation, Inc. was founded in 1893 and is based in West Des Moines, Iowa.
First Mid-Illinois Bancshares Company Profile
First Mid Bancshares, Inc., through its subsidiaries, provides community banking products and services to commercial, retail, and agricultural customers in the United States. It accepts various deposit products, such as demand deposits, savings accounts, money market deposits, and time deposits. The company's loan products include commercial real estate, commercial and industrial, agricultural and agricultural real estate, residential real estate, and consumer loans; and other loans comprising loans to municipalities to support community projects, such as infrastructure improvements or equipment purchases. It also offers wealth management services, which include estate planning, investment, and farm management services for individuals; and employee benefit services for business enterprises. In addition, the company provides commercial lines insurance to businesses, as well as homeowner, automobile, health, life, and other types of personal lines insurance to individuals. As of March 4, 2019, it operated through a network of 67 banking centers in Illinois and Missouri, and a loan production office in Indiana. The company was formerly known as First Mid-Illinois Bancshares, Inc. and changed its name to First Mid Bancshares, Inc. in April 2019. First Mid Bancshares, Inc. was incorporated in 1981 and is headquartered in Mattoon, Illinois.
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