Head to Head Survey: Eagle Financial Services (NASDAQ:EFSI) versus MainStreet Bancshares (NASDAQ:MNSB)

MainStreet Bancshares (NASDAQ:MNSB) and Eagle Financial Services (NASDAQ:EFSI) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, valuation, risk and earnings.

Analyst Ratings

This is a breakdown of current ratings and target prices for MainStreet Bancshares and Eagle Financial Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MainStreet Bancshares	0	0	0	0	0.00
Eagle Financial Services	0	0	2	0	3.00

Eagle Financial Services has a consensus target price of $40.00, suggesting a potential upside of 26.98%. Given Eagle Financial Services’ stronger consensus rating and higher probable upside, analysts plainly believe Eagle Financial Services is more favorable than MainStreet Bancshares.

Insider & Institutional Ownership

52.3% of MainStreet Bancshares shares are owned by institutional investors. Comparatively, 0.3% of Eagle Financial Services shares are owned by institutional investors. 9.2% of MainStreet Bancshares shares are owned by insiders. Comparatively, 8.7% of Eagle Financial Services shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

MainStreet Bancshares has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Eagle Financial Services has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500.

Earnings and Valuation

This table compares MainStreet Bancshares and Eagle Financial Services”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MainStreet Bancshares	$67.01 million	2.27	-$9.98 million	($1.72)	-11.47
Eagle Financial Services	$65.83 million	2.57	$15.34 million	$2.07	15.22

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

Dividends

MainStreet Bancshares pays an annual dividend of $0.40 per share and has a dividend yield of 2.0%. Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 3.9%. MainStreet Bancshares pays out -23.3% of its earnings in the form of a dividend. Eagle Financial Services pays out 59.9% 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. Eagle Financial Services has raised its dividend for 14 consecutive years. Eagle Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares MainStreet Bancshares and Eagle Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MainStreet Bancshares	-7.24%	2.96%	0.27%
Eagle Financial Services	13.59%	10.92%	0.67%

Summary

Eagle Financial Services beats MainStreet Bancshares on 12 of the 17 factors compared between the two stocks.

About MainStreet Bancshares

MainStreet Bancshares, Inc. operates as the bank holding company for MainStreet Bank that provides various banking products and services for individuals, small to medium-sized businesses, and professional service organizations. The company offers demand, NOW, money market, savings, and sweep accounts, as well as certificates of deposit; business and consumer checking, interest-bearing checking, business account analysis, and other depository services; and cash management, wire transfer, check imaging, bill pay, remote deposit capture, and courier services. It also provides commercial loans, include government contract receivables, plant and equipment, general working capital, contract administration, and acquisition loans; commercial real estate, real estate construction, and residential real estate loans; and consumer loans comprising term loans and overdraft protection, as well as debit and credit cards. In addition, the company offers deposit insurance solutions; remote deposit of checks; and internet bill payment, online cash management, and online and mobile banking services. It operates in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington D.C., as well as automated teller machines. The company was incorporated in 2003 and is headquartered in Fairfax, Virginia.

About Eagle Financial Services

Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke County that provides various retail and commercial banking products and services in the Shenandoah Valley and Northern Virginia. The company’s deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers personal and retirement plan services; investment services comprising tax-deferred annuities, IRAs and rollovers, mutual funds, retirement plans, college savings plans, life insurance, long term care insurance, fixed income investing, brokerage CDs, and full service or discount brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through twelve full-service branches, two loan production offices, one wealth management office, and one drive-through only facility, as well as 13 ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, Virginia.