Reviewing LINKBANCORP (NASDAQ:LNKB) and Midland States Bancorp (NASDAQ:MSBI)

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

Institutional and Insider Ownership

60.9% of Midland States Bancorp shares are held by institutional investors. Comparatively, 37.5% of LINKBANCORP shares are held by institutional investors. 5.6% of Midland States Bancorp shares are held by insiders. Comparatively, 35.8% of LINKBANCORP shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Midland States Bancorp and LINKBANCORP, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Midland States Bancorp	0	3	0	0	2.00
LINKBANCORP	0	1	0	0	2.00

Midland States Bancorp presently has a consensus price target of $26.00, suggesting a potential downside of 2.07%. LINKBANCORP has a consensus price target of $7.50, suggesting a potential upside of 0.94%. Given LINKBANCORP’s higher probable upside, analysts clearly believe LINKBANCORP is more favorable than Midland States Bancorp.

Risk & Volatility

Midland States Bancorp has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, LINKBANCORP has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.

Dividends

Midland States Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 4.7%. LINKBANCORP pays an annual dividend of $0.30 per share and has a dividend yield of 4.0%. Midland States Bancorp pays out 53.7% of its earnings in the form of a dividend. LINKBANCORP pays out -428.6% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Midland States Bancorp	12.13%	9.00%	0.78%
LINKBANCORP	3.65%	7.92%	0.77%

Valuation and Earnings

This table compares Midland States Bancorp and LINKBANCORP”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Midland States Bancorp	$470.89 million	1.21	$75.46 million	$2.31	11.49
LINKBANCORP	$96.11 million	2.89	-$11.97 million	($0.07)	-106.14

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

Summary

Midland States Bancorp beats LINKBANCORP on 10 of the 14 factors compared between the two stocks.

About Midland States Bancorp

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, and Other segments. The company provides a range of financial products and services to consumers and businesses, including commercial loans to finance agricultural equipment and production; and commercial real estate loans for owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties, and assisted living facilities. In addition, it offers construction and land development loans, such as real estate investment properties and residential developments, and lesser extent loans; and residential real estate loans, which includes first and second mortgage loans, and home equity lines of credit consisting of loans secured by first or second mortgages on primarily owner occupied primary residences. The company also provides consumer installment loans for the purchase of cars, boats and other recreational vehicles, as well as for the purchase of major appliances and other home improvement projects; and commercial equipment leasing programs for manufacturing, construction, transportation, and healthcare industries. Further, it offers merchant services; deposit products, including checking, time, savings, money market, and certificates of deposit, as well as sweep accounts; letters of credit; and trust and wealth management services, such as financial and estate planning, trustee and custodial, investment management, tax, insurance, and business planning, corporate retirement plan consulting and administration, and retail brokerage services. The company was founded in 1881 and is headquartered in Effingham, Illinois.

About LINKBANCORP

LINKBANCORP, Inc. operates as a bank holding company for The Gratz Bank, that provides various banking products and services to individuals, families, nonprofit, and business customers in Pennsylvania. Its deposit products include demand, saving, and money market accounts, as well as certificates of deposits. The company also offers commercial real estate, commercial business, commercial real estate construction, land development, residential real estate, home equity, consumer, agricultural, and municipal loans. It also provides online banking, mobile banking, direct and remote deposit, and cash management services. The company was incorporated in 2018 and is headquartered in Camp Hill, Pennsylvania.