MainStreet Bank (NASDAQ:MNSB) and First Financial Corporation Indiana (NASDAQ:THFF) Head to Head Analysis

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

Insider & Institutional Ownership

72.7% of First Financial Corporation Indiana shares are held by institutional investors. Comparatively, 52.3% of MainStreet Bank shares are held by institutional investors. 5.0% of First Financial Corporation Indiana shares are held by insiders. Comparatively, 10.2% of MainStreet Bank shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

First Financial Corporation Indiana pays an annual dividend of $2.24 per share and has a dividend yield of 3.0%. MainStreet Bank pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. First Financial Corporation Indiana pays out 31.4% 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. First Financial Corporation Indiana has raised its dividend for 2 consecutive years. First Financial Corporation Indiana is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current recommendations for First Financial Corporation Indiana and MainStreet Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Corporation Indiana	0	4	1	1	2.50
MainStreet Bank	0	1	1	0	2.50

First Financial Corporation Indiana presently has a consensus target price of $87.25, indicating a potential upside of 16.97%. Given First Financial Corporation Indiana’s higher probable upside, research analysts clearly believe First Financial Corporation Indiana is more favorable than MainStreet Bank.

Valuation & Earnings

This table compares First Financial Corporation Indiana 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
First Financial Corporation Indiana	$347.56 million	2.55	$79.21 million	$7.14	10.45
MainStreet Bank	$135.62 million	1.25	$15.61 million	$2.04	11.67

First Financial Corporation Indiana has higher revenue and earnings than MainStreet Bank. First Financial Corporation Indiana 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

First Financial Corporation Indiana has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, MainStreet Bank has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Profitability

This table compares First Financial Corporation Indiana and MainStreet Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial Corporation Indiana	23.32%	13.02%	1.43%
MainStreet Bank	13.24%	9.16%	0.79%

Summary

First Financial Corporation Indiana beats MainStreet Bank on 12 of the 16 factors compared between the two stocks.

About First Financial Corporation Indiana

First Financial Corporation, through its subsidiaries, provides various financial services. The company offers non-interest-bearing demand, interest-bearing demand, savings, time, and other time deposits. It also provides commercial loans primarily to expand a business or finance asset purchases; residential real estate and residential real estate construction loans; and home equity loans and lines, secured loans, and cash/CD secured and unsecured loans. In addition, the company offers lease financing, trust account, depositor, and insurance services. The company was founded in 1834 and is headquartered in Terre Haute, Indiana.

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.