Critical Review: First Business Financial Services (NASDAQ:FBIZ) versus MVB Financial (NASDAQ:MVBF)

First Business Financial Services (NASDAQ:FBIZ) and MVB Financial (NASDAQ:MVBF) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, valuation and earnings.

Profitability

This table compares First Business Financial Services and MVB Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Business Financial Services	15.46%	13.70%	1.10%
MVB Financial	8.49%	6.29%	0.55%

Dividends

First Business Financial Services pays an annual dividend of $1.00 per share and has a dividend yield of 2.0%. MVB Financial pays an annual dividend of $0.68 per share and has a dividend yield of 3.2%. First Business Financial Services pays out 21.5% of its earnings in the form of a dividend. MVB Financial pays out 47.9% 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. First Business Financial Services has increased its dividend for 12 consecutive years.

Valuation and Earnings

This table compares First Business Financial Services and MVB Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Business Financial Services	$148.94 million	2.84	$37.03 million	$4.66	10.93
MVB Financial	$209.53 million	1.33	$31.23 million	$1.42	15.15

First Business Financial Services has higher earnings, but lower revenue than MVB Financial. First Business Financial Services is trading at a lower price-to-earnings ratio than MVB Financial, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

First Business Financial Services has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, MVB Financial has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for First Business Financial Services and MVB Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Business Financial Services	0	0	4	0	3.00
MVB Financial	0	1	2	0	2.67

First Business Financial Services presently has a consensus price target of $50.00, indicating a potential downside of 1.83%. MVB Financial has a consensus price target of $25.00, indicating a potential upside of 16.23%. Given MVB Financial’s higher possible upside, analysts plainly believe MVB Financial is more favorable than First Business Financial Services.

Institutional and Insider Ownership

60.1% of First Business Financial Services shares are held by institutional investors. Comparatively, 52.7% of MVB Financial shares are held by institutional investors. 6.3% of First Business Financial Services shares are held by company insiders. Comparatively, 11.1% of MVB Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

First Business Financial Services beats MVB Financial on 11 of the 17 factors compared between the two stocks.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.

About MVB Financial

MVB Financial Corp. operates as bank holding company for MVB Bank, Inc that provides financial services to individuals and corporate clients. The company operates through three segments: CoRe Banking, Mortgage Banking, and The Financial Holding Company. It offers various demand deposit accounts, savings accounts, money market accounts, and certificates of deposit; and commercial, consumer, and real estate mortgage loans, as well as lines of credit. The company also provides debit cards; cashier's checks; safe deposit rental facilities; and non-deposit investment services, as well as financial technology (Fintech) banking services. In addition, it offers fintech solutions for the gaming, payments, banking-as-a-service, and digital asset sectors; fraud prevention services for merchants, credit agencies, Fintech companies, and other vendors; and digital products and web and mobile applications for forward-thinking community banks, credit unions, digital banks, and Fintech companies. It operates full-service branches in West Virginia and Virginia. MVB Financial Corp. was founded in 1997 and is based in Fairmont, West Virginia.