Critical Survey: Midland States Bancorp (NASDAQ:MSBI) and Dimeco (OTCMKTS:DIMC)

Midland States Bancorp (NASDAQ:MSBI) and Dimeco (OTCMKTS:DIMC) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider and Institutional Ownership

54.8% of Midland States Bancorp shares are held by institutional investors. Comparatively, 0.3% of Dimeco shares are held by institutional investors. 7.9% of Midland States Bancorp shares are held by insiders. Comparatively, 19.0% of Dimeco shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Midland States Bancorp and Dimeco’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Midland States Bancorp $324.80 million 1.25 $55.78 million $2.26 7.98
Dimeco $37.40 million 2.13 $8.73 million N/A N/A

Midland States Bancorp has higher revenue and earnings than Dimeco.

Volatility & Risk

Midland States Bancorp has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, Dimeco has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500.

Profitability

This table compares Midland States Bancorp and Dimeco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Midland States Bancorp 7.65% 6.31% 0.64%
Dimeco N/A N/A N/A

Dividends

Midland States Bancorp pays an annual dividend of $1.07 per share and has a dividend yield of 5.9%. Dimeco pays an annual dividend of $1.32 per share and has a dividend yield of 4.0%. Midland States Bancorp pays out 47.3% of its earnings in the form of a dividend. Midland States Bancorp has raised its dividend for 1 consecutive years. Midland States Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations for Midland States Bancorp and Dimeco, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Midland States Bancorp 0 4 0 0 2.00
Dimeco 0 0 0 0 N/A

Midland States Bancorp presently has a consensus price target of $19.00, indicating a potential upside of 5.38%. Given Midland States Bancorp’s higher probable upside, analysts clearly believe Midland States Bancorp is more favorable than Dimeco.

Summary

Midland States Bancorp beats Dimeco on 10 of the 13 factors compared between the two stocks.

Midland States Bancorp Company Profile

Midland States Bancorp, Inc. operates as a financial holding company for Midland States Bank that provides various banking products and services to individuals, businesses, municipalities, and other entities. It operates through Banking, Wealth Management, Commercial FHA Origination and Servicing, and Other segments. The company accepts various deposits, such as checking, savings, money market, and sweep accounts, as well as certificates of deposit, noninterest-bearing and interest-bearing demand deposits, and time deposits. It also offers commercial lending products, including owner occupied commercial real estate, commercial real estate investment, real estate construction, and multifamily loans, as well as loans to purchase farmland and finance agricultural production; business term loans, equipment financing, and lines of credit; and consumer installment loans for purchase of cars, boats, and other recreational vehicles, as well as appliances and other home improvement projects. In addition, the company provides residential first and second mortgage loans; home equity lines of credit; and commercial mortgage loans for multifamily and healthcare facilities. Further, it offers commercial equipment leasing, merchant, and treasury management services. Additionally, the company provides trust and wealth management products and services, including financial and estate planning, trustee and custodial services, investment management, tax and insurance planning, business planning, corporate retirement plan consulting and administration, and retail brokerage services. As of December 31, 2019, it operated 67 banking offices in 48 communities. The company was founded in 1881 and is headquartered in Effingham, Illinois.

Dimeco Company Profile

Dimeco, Inc. operates as a bank holding company for The Dime Bank that provides various financial services and solutions to individuals and businesses in the United States. The company accepts various deposits, including checking, savings, holiday club, personal money market, and individual retirement accounts; and certificates of deposits. It also provides personal, mortgage, home equity, lot, auto, student, business term, vehicle, equipment, capital improvement, and commercial real estate loans; business line of credit; and acquisition financing services. In addition, the company offers business services, such as cash management, check recovery, remote deposit, and merchant services; and retirement products and services. Further, it provides wealth management; e-services, such as online banking and bill pay, mobile banking, mobile deposit, interbank transfer, and e-statement services; additional services, including telephone banking, ATM, bank by mail, direct deposit, coin machine, night drop banking, automated payment and savings, and wire transfer services; safe deposit boxes; stamps; and debit and credit cards. The company operates seven branches in Carbondale, Hawley, Damascus, Honesdale, Dingmans Ferry, and Greentown Pennsylvania; and an operations center in Honesdale, Pennsylvania. Dimeco, Inc. was founded in 1905 and is headquartered in Honesdale, Pennsylvania.

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