Financial Comparison: QNB (OTCMKTS:QNBC) vs. First Mid Bancshares (NASDAQ:FMBH)

QNB (OTCMKTS:QNBC) and First Mid Bancshares (NASDAQ:FMBH) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

Dividends

QNB pays an annual dividend of $1.56 per share and has a dividend yield of 3.6%. First Mid Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. QNB pays out 40.9% of its earnings in the form of a dividend. First Mid Bancshares pays out 25.2% 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. First Mid Bancshares has increased its dividend for 3 consecutive years.

Insider and Institutional Ownership

0.7% of QNB shares are held by institutional investors. Comparatively, 47.6% of First Mid Bancshares shares are held by institutional investors. 14.5% of QNB shares are held by insiders. Comparatively, 6.0% of First Mid Bancshares shares are held 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.

Profitability

This table compares QNB and First Mid Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
QNB	14.26%	17.60%	1.13%
First Mid Bancshares	19.95%	10.44%	1.23%

Analyst Recommendations

This is a summary of current ratings and target prices for QNB and First Mid Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
QNB	0	0	0	0	0.00
First Mid Bancshares	0	3	3	0	2.50

First Mid Bancshares has a consensus target price of $49.50, suggesting a potential upside of 11.84%. Given First Mid Bancshares’ stronger consensus rating and higher possible upside, analysts plainly believe First Mid Bancshares is more favorable than QNB.

Volatility and Risk

QNB has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, First Mid Bancshares has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Earnings & Valuation

This table compares QNB and First Mid Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
QNB	$99.60 million	2.19	$14.09 million	$3.81	11.53
First Mid Bancshares	$466.04 million	2.53	$91.75 million	$3.97	11.15

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

Summary

First Mid Bancshares beats QNB on 13 of the 17 factors compared between the two stocks.

About QNB

QNB Corp. operates as the bank holding company for QNB Bank that engages in the provision of commercial and retail banking products, and retail brokerage services. It offers various deposit products, which include demand and savings accounts, such as money market, interest-bearing demand, club, traditional statement savings, and online savings accounts; and time deposits comprising certificates of deposit and individual retirement accounts. The company also provides commercial and industrial loans, commercial and residential real estate loans, construction and land development loans, indirect lease financing, 1-4 family residential mortgage loans, home equity loans and lines of credit, and consumer loans. In addition, it offers retail brokerage and advisory services; credit cards and insurance products; merchant services; ATM and debit card services; and internet and mobile-banking, electronic bill pay, and remote deposit capture services. The company serves other community banks, thrift institutions, credit unions and other non-bank financial organizations, such as mutual fund companies, insurance companies, and brokerage companies. QNB Corp. was founded in 1877 and is based in Quakertown, Pennsylvania.

About First Mid Bancshares

First Mid Bancshares, Inc., a financial holding company, 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, as well as construction and land development, 1-4 family residential properties, and multifamily residential properties 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 and brokerage services for individuals; employee benefit services for businesses; and farm management and brokerage services. In addition, the company provides property and casualty, senior insurance products, and group medical insurance for businesses; and personal lines insurance to individuals. 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 founded in 1865 and is headquartered in Mattoon, Illinois.