Reviewing MidWestOne Financial Group (NASDAQ:MOFG) and Bankwell Financial Group (NASDAQ:BWFG)

MidWestOne Financial Group (NASDAQ:MOFG) and Bankwell Financial Group (NASDAQ:BWFG) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, institutional ownership, valuation, dividends, earnings and profitability.

Analyst Recommendations

This is a summary of recent ratings and target prices for MidWestOne Financial Group and Bankwell Financial Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MidWestOne Financial Group	0	1	0	0	2.00
Bankwell Financial Group	0	2	1	1	2.75

Bankwell Financial Group has a consensus target price of $67.50, suggesting a potential upside of 0.91%. Given Bankwell Financial Group’s stronger consensus rating and higher possible upside, analysts clearly believe Bankwell Financial Group is more favorable than MidWestOne Financial Group.

Institutional and Insider Ownership

65.4% of MidWestOne Financial Group shares are held by institutional investors. Comparatively, 35.8% of Bankwell Financial Group shares are held by institutional investors. 2.5% of MidWestOne Financial Group shares are held by company insiders. Comparatively, 21.0% of Bankwell Financial Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MidWestOne Financial Group	16.66%	10.22%	0.96%
Bankwell Financial Group	19.80%	13.94%	1.27%

Risk & Volatility

MidWestOne Financial Group has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Bankwell Financial Group has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Dividends

MidWestOne Financial Group pays an annual dividend of $0.97 per share and has a dividend yield of 2.0%. Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. MidWestOne Financial Group pays out 34.5% of its earnings in the form of a dividend. Bankwell Financial Group pays out 15.0% 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.

Earnings & Valuation

This table compares MidWestOne Financial Group and Bankwell Financial Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MidWestOne Financial Group	$238.84 million	4.26	-$60.29 million	$2.81	17.55
Bankwell Financial Group	$207.71 million	2.57	$35.20 million	$5.35	12.50

Bankwell Financial Group has lower revenue, but higher earnings than MidWestOne Financial Group. Bankwell Financial Group 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.

Summary

Bankwell Financial Group beats MidWestOne Financial Group on 11 of the 17 factors compared between the two stocks.

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.

About Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans to finance insurance premiums; overdraft lines of credit; and unsecured personal loans. It operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.