Financial Contrast: Citizens (NASDAQ:CIZN) and MidWestOne Financial Group (NASDAQ:MOFG)

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

Analyst Ratings

This is a summary of recent recommendations for MidWestOne Financial Group and Citizens, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MidWestOne Financial Group	0	2	1	0	2.33
Citizens	0	0	0	0	0.00

MidWestOne Financial Group currently has a consensus price target of $34.67, indicating a potential upside of 30.23%. Given MidWestOne Financial Group’s stronger consensus rating and higher probable upside, analysts clearly believe MidWestOne Financial Group is more favorable than Citizens.

Dividends

MidWestOne Financial Group pays an annual dividend of $0.97 per share and has a dividend yield of 3.6%. Citizens pays an annual dividend of $0.08 per share and has a dividend yield of 1.1%. MidWestOne Financial Group pays out -23.9% of its earnings in the form of a dividend. Citizens pays out 8.2% 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. MidWestOne Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

MidWestOne Financial Group has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Citizens has a beta of 0.02, indicating that its share price is 98% less volatile than the S&P 500.

Earnings & Valuation

This table compares MidWestOne Financial Group and Citizens”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MidWestOne Financial Group	$69.29 million	8.00	-$60.29 million	($4.06)	-6.56
Citizens	$40.95 million	1.00	$5.49 million	$0.98	7.40

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MidWestOne Financial Group	9.79%	6.54%	0.54%
Citizens	7.00%	11.28%	0.37%

Insider & Institutional Ownership

65.4% of MidWestOne Financial Group shares are owned by institutional investors. Comparatively, 9.7% of Citizens shares are owned by institutional investors. 2.5% of MidWestOne Financial Group shares are owned by insiders. Comparatively, 8.9% of Citizens shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

MidWestOne Financial Group beats Citizens on 11 of the 16 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 Citizens

Citizens Holding Company operates as the bank holding company for The Citizens Bank of Philadelphia that provides various commercial and personal banking products and services. It offers demand deposits; and savings and time deposit accounts. The company also provides secured and unsecured loans; mortgage loans; single and multi-family housing, farm, residential and commercial construction, and commercial real estate loans; commercial, industrial, and agricultural production loans; and consumer loans, as well as issues letters of credit. In addition, it offers personal and corporate trust services; credit life and title insurance; and online and mobile banking services. The company was founded in 1908 and is headquartered in Philadelphia, Mississippi.