Comparing Ames National (NASDAQ:ATLO) & MidWestOne Financial Group (NASDAQ:MOFG)

MidWestOne Financial Group (NASDAQ:MOFG) and Ames National (NASDAQ:ATLO) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Volatility and Risk

MidWestOne Financial Group has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Ames National has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Profitability

This table compares MidWestOne Financial Group and Ames National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MidWestOne Financial Group	16.66%	10.22%	0.96%
Ames National	19.36%	9.90%	0.89%

Analyst Recommendations

This is a summary of current ratings for MidWestOne Financial Group and Ames National, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MidWestOne Financial Group	0	4	1	0	2.20
Ames National	0	0	1	0	3.00

MidWestOne Financial Group presently has a consensus target price of $40.50, suggesting a potential downside of 15.63%. Given MidWestOne Financial Group’s higher possible upside, equities analysts clearly believe MidWestOne Financial Group is more favorable than Ames National.

Dividends

MidWestOne Financial Group pays an annual dividend of $0.97 per share and has a dividend yield of 2.0%. Ames National pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. MidWestOne Financial Group pays out 34.5% of its earnings in the form of a dividend. Ames National pays out 37.4% 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.

Valuation & Earnings

This table compares MidWestOne Financial Group and Ames National”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MidWestOne Financial Group	$206.03 million	4.81	-$60.29 million	$2.81	17.08
Ames National	$98.26 million	2.53	$19.03 million	$2.14	13.07

Ames National has lower revenue, but higher earnings than MidWestOne Financial Group. Ames National is trading at a lower price-to-earnings ratio than MidWestOne Financial Group, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

65.4% of MidWestOne Financial Group shares are owned by institutional investors. Comparatively, 26.5% of Ames National shares are owned by institutional investors. 2.5% of MidWestOne Financial Group shares are owned by insiders. Comparatively, 2.1% of Ames National shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

MidWestOne Financial Group beats Ames National on 11 of the 15 factors compared between the two stocks.

About MidWestOne Financial Group

MidWestOne Financial Group, Inc. operates as the bank holding company for MidWestOne Bank that provides commercial and retail banking products and services to individuals, businesses, governmental units, and institutional customers. It offers range of deposit products, including noninterest bearing and interest bearing demand deposits, savings, money market, and time deposits accounts. The company also provides commercial, real estate, agricultural, credit card, and consumer loans; and financing arrangements, such as brokered deposits, term debt, subordinated debt, and equity. In addition, it offers trust and investment services comprising administering estates, trusts, and conservatorships; property and farm management, investment advisory, retail securities brokerage, financial planning, and custodial services; and licensed brokers services. Further, the company provides online and mobile banking, debit cards, automated teller machines, and safe deposit boxes. MidWestOne Financial Group, Inc. was founded in 1934 and is headquartered in Iowa City, Iowa.

About Ames National

Ames National Corporation operates as a multi-bank holding company that provides banking products and services primarily in Boone, Clarke, Hancock, Marshall, Polk, Story, and Union counties in central, north central, and south-central Iowa. The company accepts various deposit products, including checking and savings accounts; and time deposits, such as money market accounts and certificates of deposit. It also provides loans, such as short-term and medium-term commercial and agricultural real estate, residential real estate loans, equipment, vehicle, and home improvement loans; consumer loans to finance consumer purchases, such as automobiles, trucks, recreational vehicles, household furnishings, boats, personal loans, and lines of credit; agricultural and business operating loans and lines of credit; and originates mortgage loans for sale into the secondary market. In addition, the company offers cash management, merchant credit card processing, safe deposit box, wire transfer, direct deposit, and automated/video teller machine access services; and automatic drafts for various accounts, as well as wealth management services. Further, it provides farm management, investment, and custodial services for individuals, businesses, and non-profit organizations; and online, mobile, and private banking services. Ames National Corporation was incorporated in 1903 and is headquartered in Ames, Iowa.