Head to Head Contrast: MainStreet Bancshares (NASDAQ:MNSB) vs. 1st Source (NASDAQ:SRCE)


MainStreet Bancshares (NASDAQ:MNSBGet Rating) and 1st Source (NASDAQ:SRCEGet Rating) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Risk and Volatility

MainStreet Bancshares has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, 1st Source has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.

Dividends

MainStreet Bancshares pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. 1st Source pays an annual dividend of $1.24 per share and has a dividend yield of 2.9%. MainStreet Bancshares pays out 7.6% of its earnings in the form of a dividend. 1st Source 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. 1st Source has increased its dividend for 35 consecutive years. 1st Source is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares MainStreet Bancshares and 1st Source’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MainStreet Bancshares 31.18% 14.12% 1.33%
1st Source 33.48% 12.43% 1.48%

Analyst Recommendations

This is a summary of recent recommendations and price targets for MainStreet Bancshares and 1st Source, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MainStreet Bancshares 0 0 1 0 3.00
1st Source 0 0 0 0 N/A

MainStreet Bancshares presently has a consensus price target of $26.00, indicating a potential upside of 7.13%. Given MainStreet Bancshares’ higher probable upside, equities analysts plainly believe MainStreet Bancshares is more favorable than 1st Source.

Earnings & Valuation

This table compares MainStreet Bancshares and 1st Source’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MainStreet Bancshares $70.31 million 2.64 $22.17 million $2.63 9.23
1st Source $354.86 million 3.02 $118.53 million $4.69 9.23

1st Source has higher revenue and earnings than MainStreet Bancshares. 1st Source is trading at a lower price-to-earnings ratio than MainStreet Bancshares, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

41.9% of MainStreet Bancshares shares are owned by institutional investors. Comparatively, 73.0% of 1st Source shares are owned by institutional investors. 7.8% of MainStreet Bancshares shares are owned by company insiders. Comparatively, 19.1% of 1st Source shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

1st Source beats MainStreet Bancshares on 11 of the 16 factors compared between the two stocks.

About MainStreet Bancshares (Get Rating)

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, remote deposit capture, and courier services. It also provides commercial loans, including 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 provides deposit insurance solutions; remote deposit of checks; and internet bill payment, online cash management, and online and mobile banking services. As of March 18, 2022, it operated six branches in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington D.C., as well as 55,000 automated teller machines. MainStreet Bancshares, Inc. was incorporated in 2003 and is headquartered in Fairfax, Virginia.

About 1st Source (Get Rating)

1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and wealth advisory services, and insurance products to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate mortgage loans, and home equity lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for construction equipment, new and pre-owned aircraft, auto and light trucks, and medium and heavy duty trucks; and finances construction equipment, aircrafts, medium and heavy duty trucks, step vans, vocational work trucks, motor coaches, shuttle buses, funeral cars, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services. As of December 31, 2021, the company operated through 79 banking centers in 18 counties in Indiana and Michigan, as well as Sarasota County in Florida. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.



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