Critical Review: Mid Penn Bancorp (NASDAQ:MPB) and Southern Missouri Bancorp (NASDAQ:SMBC)

Southern Missouri Bancorp (NASDAQ:SMBC) and Mid Penn Bancorp (NASDAQ:MPB) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, earnings, institutional ownership, dividends, valuation, analyst recommendations and risk.

Volatility & Risk

Southern Missouri Bancorp has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Mid Penn Bancorp has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500.

Dividends

Southern Missouri Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 1.5%. Mid Penn Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 2.7%. Southern Missouri Bancorp pays out 16.8% of its earnings in the form of a dividend. Mid Penn Bancorp pays out 32.5% 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. Southern Missouri Bancorp has raised its dividend for 13 consecutive years.

Profitability

This table compares Southern Missouri Bancorp and Mid Penn Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern Missouri Bancorp	23.47%	13.02%	1.46%
Mid Penn Bancorp	17.83%	9.15%	1.18%

Valuation & Earnings

This table compares Southern Missouri Bancorp and Mid Penn Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern Missouri Bancorp	$316.78 million	2.50	$71.84 million	$6.43	11.18
Mid Penn Bancorp	$350.61 million	2.48	$56.25 million	$2.83	12.11

Southern Missouri Bancorp has higher earnings, but lower revenue than Mid Penn Bancorp. Southern Missouri Bancorp is trading at a lower price-to-earnings ratio than Mid Penn Bancorp, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

49.5% of Southern Missouri Bancorp shares are owned by institutional investors. Comparatively, 43.1% of Mid Penn Bancorp shares are owned by institutional investors. 14.6% of Southern Missouri Bancorp shares are owned by company insiders. Comparatively, 7.2% of Mid Penn Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Southern Missouri Bancorp and Mid Penn Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern Missouri Bancorp	0	5	1	1	2.43
Mid Penn Bancorp	0	1	4	0	2.80

Southern Missouri Bancorp presently has a consensus target price of $81.75, indicating a potential upside of 13.70%. Mid Penn Bancorp has a consensus target price of $40.33, indicating a potential upside of 17.73%. Given Mid Penn Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Mid Penn Bancorp is more favorable than Southern Missouri Bancorp.

Summary

Southern Missouri Bancorp beats Mid Penn Bancorp on 13 of the 18 factors compared between the two stocks.

About Southern Missouri Bancorp

Southern Missouri Bancorp, Inc. operates as the bank holding company for Southern Bank that provides banking and financial services to individuals and corporate customers in the United States. The company offers deposits products, including interest-bearing and noninterest-bearing transaction accounts, saving accounts, certificates of deposit, retirement savings plans, and money market deposit accounts. It also provides loans, such as residential mortgage, commercial real estate, construction, and commercial business loans; and consumer loans comprising home equity, direct and indirect automobile loans, second mortgages, mobile home loans, and loans secured by deposits. In addition, the company offers fiduciary and investment management services; commercial and consumer insurance; online and mobile banking services; and debit or credit cards. The company was founded in 1887 and is headquartered in Poplar Bluff, Missouri.

About Mid Penn Bancorp

Mid Penn Bancorp, Inc. operates as the bank holding company for Mid Penn Bank that provides commercial banking services to individuals, partnerships, non-profit organizations, and corporations. The company offers various time and demand deposit products, including checking accounts, savings accounts, clubs, money market deposit accounts, certificates of deposit, and individual retirement accounts. It also provides a range of loan products comprising mortgage and home equity loans, secured and unsecured commercial and consumer loans, lines of credit, construction financing, farm loans, community development loans, loans to non-profit entities, and local government loans. In addition, the company offers trust, retail investment, wealth management, and insurance services; and provides online banking, telephone banking, cash management, and automated teller services, as well as safe deposit boxes. The company was founded in 1868 and is headquartered in Harrisburg, Pennsylvania.