Reviewing MainStreet Bank (NASDAQ:MNSB) and OP Bancorp (NASDAQ:OPBK)

OP Bancorp (NASDAQ:OPBK) and MainStreet Bank (NASDAQ:MNSB) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Analyst Ratings

This is a breakdown of recent recommendations for OP Bancorp and MainStreet Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OP Bancorp	0	2	2	0	2.50
MainStreet Bank	0	1	1	0	2.50

OP Bancorp currently has a consensus price target of $17.75, indicating a potential upside of 18.22%. Given OP Bancorp’s higher possible upside, equities research analysts clearly believe OP Bancorp is more favorable than MainStreet Bank.

Earnings and Valuation

This table compares OP Bancorp and MainStreet Bank”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OP Bancorp	$166.66 million	1.35	$25.64 million	$2.00	7.51
MainStreet Bank	$135.62 million	1.12	$15.61 million	$2.04	10.43

OP Bancorp has higher revenue and earnings than MainStreet Bank. OP Bancorp is trading at a lower price-to-earnings ratio than MainStreet Bank, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

OP Bancorp has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, MainStreet Bank has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Insider & Institutional Ownership

53.6% of OP Bancorp shares are held by institutional investors. Comparatively, 52.3% of MainStreet Bank shares are held by institutional investors. 9.6% of OP Bancorp shares are held by company insiders. Comparatively, 10.2% of MainStreet Bank shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares OP Bancorp and MainStreet Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OP Bancorp	17.09%	12.89%	1.11%
MainStreet Bank	13.24%	9.16%	0.79%

Dividends

OP Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 3.7%. MainStreet Bank pays an annual dividend of $0.40 per share and has a dividend yield of 1.9%. OP Bancorp pays out 28.0% of its earnings in the form of a dividend. MainStreet Bank pays out 19.6% 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.

Summary

OP Bancorp beats MainStreet Bank on 11 of the 15 factors compared between the two stocks.

About OP Bancorp

OP Bancorp operates as the bank holding company for Open Bank that provides banking products and services in California. It offers demand, checking, savings, money market, and time deposit accounts, as well as certificates of deposit. The company also provides commercial real estate, small business administration, commercial and industrial business, single-family residential, term, consumer, and home mortgage loans; trade financing products; and letters of credit, and SWIFT and export advice. In addition, it offers debit and credit card, online transfer and bill payment, electronic delivery of customer statements, and mobile banking solutions for iPhone and Android phones, including remote check deposit with mobile bill pay; direct deposits, cashier's checks, person to person payments, wire transfers, and automated clearing house (ACH) services; and cash management services, including balance reporting, transfers between accounts, wire transfer initiation, ACH origination, and stop payment services, as well as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company operates full branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Gardena, Buena Park, and Santa Clara in California; and Carrollton, Texas; and operates loan production offices in Pleasanton, California; Atlanta, Georgia; Aurora, Colorado; and Lynnwood in Washington. The company was founded in 2005 and is headquartered in Los Angeles, California.

About MainStreet Bank

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.