Merchants Bancorp (NASDAQ:MBIN) & Eagle Bancorp (NASDAQ:EGBN) Financial Comparison

Eagle Bancorp (NASDAQ:EGBN) and Merchants Bancorp (NASDAQ:MBIN) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, risk, profitability, valuation, dividends, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Eagle Bancorp and Merchants Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Bancorp	0	2	0	0	2.00
Merchants Bancorp	0	1	2	0	2.67

Eagle Bancorp presently has a consensus price target of $22.50, indicating a potential downside of 2.17%. Merchants Bancorp has a consensus price target of $56.00, indicating a potential upside of 29.69%. Given Merchants Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Merchants Bancorp is more favorable than Eagle Bancorp.

Dividends

Eagle Bancorp pays an annual dividend of $1.80 per share and has a dividend yield of 7.8%. Merchants Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 0.8%. Eagle Bancorp pays out 71.7% of its earnings in the form of a dividend. Merchants Bancorp pays out 5.7% 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.

Insider and Institutional Ownership

78.0% of Eagle Bancorp shares are owned by institutional investors. Comparatively, 24.6% of Merchants Bancorp shares are owned by institutional investors. 3.1% of Eagle Bancorp shares are owned by company insiders. Comparatively, 39.7% of Merchants Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Eagle Bancorp has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500. Comparatively, Merchants Bancorp has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Profitability

This table compares Eagle Bancorp and Merchants Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Bancorp	-5.28%	5.50%	0.59%
Merchants Bancorp	23.14%	25.54%	1.86%

Earnings & Valuation

This table compares Eagle Bancorp and Merchants Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Bancorp	$307.92 million	2.26	$100.53 million	$2.51	9.16
Merchants Bancorp	$636.04 million	2.94	$279.23 million	$6.37	6.78

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

Summary

Merchants Bancorp beats Eagle Bancorp on 13 of the 16 factors compared between the two stocks.

About Eagle Bancorp

Eagle Bancorp, Inc. operates as the bank holding company for EagleBank that provides commercial and consumer banking services primarily in the United States. The company also offers various commercial and consumer lending products comprising commercial loans for working capital, equipment purchases, real estate lines of credit, and government contract financing; asset based lending and accounts receivable financing; construction and commercial real estate loans; business equipment financing; consumer home equity lines of credit, personal lines of credit, and term loans; consumer installment loans, such as auto and personal loans; personal credit cards; and residential mortgage loans. In addition, it provides online and mobile banking services; checking and saving accounts; and other deposit services, including cash management services, business sweep accounts, lock boxes, remote deposit captures, account reconciliation services, merchant card services, safety deposit boxes, and automated clearing house origination, as well as after-hours depositories and ATM services. Further, the company offers insurance products and services through a referral program; and treasury management services. The company serves sole proprietors, small and medium-sized businesses, partnerships, corporations, and non-profit organizations and associations, as well as investors. Eagle Bancorp, Inc. was incorporated in 1997 and is headquartered in Bethesda, Maryland.

About Merchants Bancorp

Merchants Bancorp operates as the diversified bank holding company in the United States. It operates through three segments: Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The Multi-family Mortgage Banking segment engages in the mortgage banking, which originates and services government sponsored mortgages, including bridge financing products to refinance, acquire, or reposition multi-family housing projects, and construction lending for multi-family and healthcare facilities. This segment also offers customized loan products for need-based skilled nursing facilities, such as independent living, assisted living, and memory care; and tax credit equity syndicator service. The Mortgage Warehousing segment funds agency eligible residential loans, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, which includes retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and small business administration lending. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.