Critical Review: MidWestOne Financial Group (NASDAQ:MOFG) & Axos Financial (NYSE:AX)

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

Volatility & Risk

Axos Financial has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, MidWestOne Financial Group has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Axos Financial	$2.19 billion	2.54	$490.37 million	$8.47	11.59
MidWestOne Financial Group	$238.84 million	4.26	-$60.29 million	$2.81	17.55

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

Institutional & Insider Ownership

83.8% of Axos Financial shares are held by institutional investors. Comparatively, 65.4% of MidWestOne Financial Group shares are held by institutional investors. 4.8% of Axos Financial shares are held by company insiders. Comparatively, 2.5% of MidWestOne Financial Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Axos Financial and MidWestOne Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Axos Financial	0	2	5	1	2.88
MidWestOne Financial Group	0	2	1	0	2.33

Axos Financial currently has a consensus price target of $115.67, suggesting a potential upside of 17.83%. MidWestOne Financial Group has a consensus price target of $50.00, suggesting a potential upside of 1.40%. Given Axos Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Axos Financial is more favorable than MidWestOne Financial Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Axos Financial	22.39%	16.96%	1.77%
MidWestOne Financial Group	16.66%	10.22%	0.96%

Summary

Axos Financial beats MidWestOne Financial Group on 13 of the 15 factors compared between the two stocks.

About Axos Financial

Axos Financial, Inc., together with its subsidiaries, provides consumer and business banking products in the United States. It operates through two segments, Banking Business and Securities Business. The company offers deposits products, including consumer and business checking, demand, savings, time deposit, money market, zero balance, and insured cash sweep accounts. It also provides residential single family, multifamily, and commercial mortgage loans; commercial real estate secured loans; commercial and industrial non-real estate, asset-backed, lines of credit, and term loans; automobile loans; fixed rate unsecured loans; and other loans, such as structure settlements, small business administration consumer loans, and securities-backed loans. In addition, the company offers ACH origination, wire transfer, commercial check printing, business bill pay and account transfer; remote deposit capture, mobile deposit, lockbox, merchant, and online payment portal; concierge banking; mobile and text message banking; and payment services, as well as debit and credit cards, and digital wallets. Further, it provides disclosed clearing services; back-office services, such as record keeping, trade reporting, accounting, general back-office support, securities and margin lending, reorganization assistance, and custody of securities; and financing to brokerage customers. The company was formerly known as BofI Holding, Inc. and changed its name to Axos Financial, Inc. in September 2018. Axos Financial, Inc. was incorporated in 1999 and is based in Las Vegas, Nevada.

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.