MetroCity Bankshares (NASDAQ:MCBS) and Summit Financial Group (NASDAQ:SMMF) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, risk and institutional ownership.
This table compares MetroCity Bankshares and Summit Financial Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Summit Financial Group||25.24%||13.28%||1.37%|
This is a breakdown of current ratings and target prices for MetroCity Bankshares and Summit Financial Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Summit Financial Group||0||1||0||0||2.00|
MetroCity Bankshares presently has a consensus price target of $16.33, suggesting a potential upside of 36.22%. Given MetroCity Bankshares’ higher possible upside, equities analysts plainly believe MetroCity Bankshares is more favorable than Summit Financial Group.
Institutional and Insider Ownership
10.3% of MetroCity Bankshares shares are owned by institutional investors. Comparatively, 25.9% of Summit Financial Group shares are owned by institutional investors. 2.6% of Summit Financial Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares MetroCity Bankshares and Summit Financial Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MetroCity Bankshares||$123.11 million||2.49||$44.72 million||$1.81||6.62|
|Summit Financial Group||$126.27 million||2.07||$31.87 million||$2.53||7.91|
MetroCity Bankshares has higher earnings, but lower revenue than Summit Financial Group. MetroCity Bankshares is trading at a lower price-to-earnings ratio than Summit Financial Group, indicating that it is currently the more affordable of the two stocks.
MetroCity Bankshares pays an annual dividend of $0.44 per share and has a dividend yield of 3.7%. Summit Financial Group pays an annual dividend of $0.68 per share and has a dividend yield of 3.4%. MetroCity Bankshares pays out 24.3% of its earnings in the form of a dividend. Summit Financial Group pays out 26.9% 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. Summit Financial Group has increased its dividend for 3 consecutive years. MetroCity Bankshares is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summit Financial Group beats MetroCity Bankshares on 9 of the 14 factors compared between the two stocks.
About MetroCity Bankshares
MetroCity Bankshares, Inc. operates as the holding company for Metro City Bank that offers banking products and services in Georgia, The United States. The company offers checking accounts, savings accounts, certificates of deposit, commercial and consumer loans, money transfers, and other banking services. It operates through branches located in Duluth, Johns Creek, Suwanee and Norcross, Georgia; Opelika and Montgomery, Alabama; Centreville, Virginia; Grand Prairie and Dallas, Texas; Fort Lee, New Jersey; and Bayside, New York. The company was founded in 2006 and is based in Doraville, Georgia.
About Summit Financial Group
Summit Financial Group, Inc. operates as a financial holding company for Summit Community Bank, Inc. that provides community banking and other financial services to individuals and businesses primarily in the Eastern Panhandle and South Central regions of West Virginia and the Shenandoah Valley, and Southwestern regions of Virginia. The company operates through three segments: Community Banking, Trust and Wealth Management, and Insurance. Its community banking services include demand, savings, and time deposits; commercial, commercial real estate, construction and land development, residential real estate, and consumer loans; and mortgage warehouse lines of credit, as well as trust and wealth management, and cash management services. The company also offers insurance brokerage services, such as corporate and personal property and casualty insurance products, as well as group health and life insurance products, and consulting services. It operates thirty banking locations. Summit Financial Group, Inc. was founded in 1987 and is headquartered in Moorefield, West Virginia.
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