Howard Bancorp (NASDAQ:HBMD) and First Mid-Illinois Bancshares (NASDAQ:FMBH) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Profitability

This table compares Howard Bancorp and First Mid-Illinois Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Howard Bancorp 9.63% 5.74% 0.76%
First Mid-Illinois Bancshares 22.04% 9.61% 1.22%

Dividends

First Mid-Illinois Bancshares pays an annual dividend of $0.72 per share and has a dividend yield of 2.3%. Howard Bancorp does not pay a dividend. First Mid-Illinois Bancshares pays out 26.4% of its earnings in the form of a dividend. First Mid-Illinois Bancshares has increased its dividend for 2 consecutive years.

Insider & Institutional Ownership

52.6% of Howard Bancorp shares are owned by institutional investors. Comparatively, 29.7% of First Mid-Illinois Bancshares shares are owned by institutional investors. 23.2% of Howard Bancorp shares are owned by insiders. Comparatively, 13.6% of First Mid-Illinois Bancshares 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.

Earnings & Valuation

This table compares Howard Bancorp and First Mid-Illinois Bancshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Howard Bancorp $98.25 million 2.85 -$3.83 million $0.65 22.60
First Mid-Illinois Bancshares $159.98 million 3.27 $36.60 million $2.73 11.48

First Mid-Illinois Bancshares has higher revenue and earnings than Howard Bancorp. First Mid-Illinois Bancshares is trading at a lower price-to-earnings ratio than Howard Bancorp, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Howard Bancorp has a beta of 0.31, indicating that its stock price is 69% less volatile than the S&P 500. Comparatively, First Mid-Illinois Bancshares has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Howard Bancorp and First Mid-Illinois Bancshares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Howard Bancorp 0 1 0 0 2.00
First Mid-Illinois Bancshares 0 1 1 0 2.50

Howard Bancorp presently has a consensus target price of $15.00, suggesting a potential upside of 2.11%. First Mid-Illinois Bancshares has a consensus target price of $40.50, suggesting a potential upside of 29.35%. Given First Mid-Illinois Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe First Mid-Illinois Bancshares is more favorable than Howard Bancorp.

Summary

First Mid-Illinois Bancshares beats Howard Bancorp on 13 of the 17 factors compared between the two stocks.

About Howard Bancorp

Howard Bancorp, Inc. operates as the bank holding company for Howard Bank that provides commercial banking, mortgage banking, and consumer finance products and services to businesses, business owners, professionals, and other consumers. The company offers various consumer and business deposit products, including demand, money market, savings, individual retirement, and commercial and retail checking accounts, as well as certificates of deposit. It also provides commercial loans, such as lines of credit, revolving credit facilities, accounts receivable and inventory financing, term loans, equipment loans, small business administration loans, stand-by letters of credit, and unsecured loans; commercial mortgage loans for owner occupied and investment properties; construction loans; residential mortgage loans; and secured and unsecured consumer loans. In addition, the company offers wire transfer services; automated teller machines and check cards; and safe deposit boxes, as well as credit cards through a third party processor. Further, it provides Internet banking, merchant card, overnight sweep, and remote deposit capture services; and Mobiliti mobile banking, PopMoney, and eStatement products. As of December 31, 2018, the company operated through a network of 21 full service branches, as well as 11 mortgage and commercial lending offices located in Maryland. Howard Bancorp, Inc. was founded in 2004 and is headquartered in Baltimore, Maryland.

About First Mid-Illinois Bancshares

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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