Analyzing First United (NASDAQ:FUNC) & Midland States Bancorp (NASDAQ:MSBI)

First United (NASDAQ:FUNC) and Midland States Bancorp (NASDAQ:MSBI) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, dividends, analyst recommendations, earnings, institutional ownership, risk and valuation.

Profitability

This table compares First United and Midland States Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First United	20.55%	13.51%	1.31%
Midland States Bancorp	7.53%	11.55%	0.78%

Valuation & Earnings

This table compares First United and Midland States Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First United	$121.42 million	2.05	$24.51 million	$3.91	9.80
Midland States Bancorp	$476.05 million	1.23	-$124.28 million	$1.18	23.99

First United has higher earnings, but lower revenue than Midland States Bancorp. First United is trading at a lower price-to-earnings ratio than Midland States Bancorp, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

First United has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Midland States Bancorp has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for First United and Midland States Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First United	0	0	1	0	3.00
Midland States Bancorp	0	5	0	1	2.33

Midland States Bancorp has a consensus price target of $23.90, suggesting a potential downside of 15.58%. Given Midland States Bancorp’s higher probable upside, analysts plainly believe Midland States Bancorp is more favorable than First United.

Institutional & Insider Ownership

33.3% of First United shares are held by institutional investors. Comparatively, 60.9% of Midland States Bancorp shares are held by institutional investors. 8.1% of First United shares are held by company insiders. Comparatively, 8.6% of Midland States Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

First United pays an annual dividend of $1.04 per share and has a dividend yield of 2.7%. Midland States Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 4.5%. First United pays out 26.6% of its earnings in the form of a dividend. Midland States Bancorp pays out 108.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. First United has raised its dividend for 6 consecutive years and Midland States Bancorp has raised its dividend for 1 consecutive years.

Summary

First United beats Midland States Bancorp on 10 of the 18 factors compared between the two stocks.

About First United

First United Corporation operates as the bank holding company for First United Bank & Trust that provides various retail and commercial banking services to businesses and individuals. It offers various deposit products, which includes checking, savings, money market deposit, and regular and individual retirement accounts (IRAs), as well as certificates of deposit. The company loan portfolio includes commercial loans secured by real estate, commercial equipment, vehicles, or other assets of the borrower; commercial real estate loans for residential and commercial development, agricultural purpose properties, and service industry buildings, such as restaurants and motels, retail buildings, and general purpose business space; residential mortgage loans; home equity lines of credit; residential real estate construction loans; and indirect and direct auto loans, student loans, and other secured and unsecured lines of credit and term loans. It also offers access to multi-million-dollar certificates of deposit and the Intrafi cash service, including multi-million-dollar savings and demand deposits to municipalities, businesses, and consumers; and treasury management, cash sweep, and various checking services. In addition, the company provides trust services, which includes personal trust, investment agency accounts, charitable trusts, retirement accounts, including IRA roll-overs, 401(k) accounts and defined benefit plans, estate administration, and estate planning; and insurance products, brokerage services, and safe deposit and night depository facilities. First United Corporation was founded in 1900 and is headquartered in Oakland, Maryland.

About Midland States Bancorp

Midland States Bancorp, Inc. operates as a financial holding company for Midland States Bank that provides various banking products and services to individuals, businesses, municipalities, and other entities. It operates through Banking, Wealth Management, and Other segments. The company provides a range of financial products and services to consumers and businesses, including commercial loans to finance agricultural equipment and production; and commercial real estate loans for owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties, and assisted living facilities. In addition, it offers construction and land development loans, such as real estate investment properties and residential developments, and lesser extent loans; and residential real estate loans, which includes first and second mortgage loans, and home equity lines of credit consisting of loans secured by first or second mortgages on primarily owner occupied primary residences. The company also provides consumer installment loans for the purchase of cars, boats and other recreational vehicles, as well as for the purchase of major appliances and other home improvement projects; and commercial equipment leasing programs for manufacturing, construction, transportation, and healthcare industries. Further, it offers merchant services; deposit products, including checking, time, savings, money market, and certificates of deposit, as well as sweep accounts; letters of credit; and trust and wealth management services, such as financial and estate planning, trustee and custodial, investment management, tax, insurance, and business planning, corporate retirement plan consulting and administration, and retail brokerage services. The company was founded in 1881 and is headquartered in Effingham, Illinois.