Red River Bancshares (NASDAQ:RRBI – Get Free Report) and Middlefield Banc (NASDAQ:MBCN – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.
Insider & Institutional Ownership
27.6% of Red River Bancshares shares are held by institutional investors. Comparatively, 31.7% of Middlefield Banc shares are held by institutional investors. 16.4% of Red River Bancshares shares are held by company insiders. Comparatively, 3.8% of Middlefield Banc shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Analyst Ratings
This is a summary of recent ratings and price targets for Red River Bancshares and Middlefield Banc, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Red River Bancshares | 0 | 0 | 1 | 0 | 3.00 |
| Middlefield Banc | 0 | 2 | 0 | 0 | 2.00 |
Earnings & Valuation
This table compares Red River Bancshares and Middlefield Banc”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Red River Bancshares | $149.60 million | 2.43 | $34.88 million | $4.69 | 11.23 |
| Middlefield Banc | $68.37 million | 3.35 | $17.37 million | $2.05 | 13.86 |
Red River Bancshares has higher revenue and earnings than Middlefield Banc. Red River Bancshares is trading at a lower price-to-earnings ratio than Middlefield Banc, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Red River Bancshares has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Middlefield Banc has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.
Dividends
Red River Bancshares pays an annual dividend of $0.36 per share and has a dividend yield of 0.7%. Middlefield Banc pays an annual dividend of $0.80 per share and has a dividend yield of 2.8%. Red River Bancshares pays out 7.7% of its earnings in the form of a dividend. Middlefield Banc pays out 39.0% 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.
Profitability
This table compares Red River Bancshares and Middlefield Banc’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Red River Bancshares | 21.56% | 10.90% | 1.06% |
| Middlefield Banc | 15.06% | 7.74% | 0.87% |
Summary
Red River Bancshares beats Middlefield Banc on 11 of the 16 factors compared between the two stocks.
About Red River Bancshares
Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.
About Middlefield Banc
Middlefield Banc Corp. operates as the bank holding company for The Middlefield Banking Company that provides various commercial banking services to small and medium-sized businesses, professionals, small business owners, and retail customers in northeastern and central Ohio. It offers checking, savings, negotiable order of withdrawal accounts, money market accounts, time certificates of deposit, commercial loans, real estate loans, various consumer loans, safe deposit facilities, and travelers' checks. The company also provides operational and working capital, term business, residential construction, professional, and residential and mortgage loans, as well as consumer installment loans for home improvements, automobiles, boats, and other personal expenditures; loans to finance capital purchases; selected guaranteed or subsidized loan programs for small businesses; and agricultural loans. In addition, the company resolves and disposes troubled assets in Ohio. Further, it offers official checks, money orders, and ATM services, as well as IRA accounts; online banking and bill payment services to individuals; and online cash management services to business customers. Middlefield Banc Corp. was founded in 1901 and is headquartered in Middlefield, Ohio.
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