Analyzing Hilltop (NYSE:HTH) and MVB Financial (NASDAQ:MVBF)

Hilltop (NYSE:HTH) and MVB Financial (NASDAQ:MVBF) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, institutional ownership, earnings, analyst recommendations, dividends and profitability.

Profitability

This table compares Hilltop and MVB Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hilltop	6.95%	5.24%	0.67%
MVB Financial	11.10%	8.65%	0.71%

Earnings & Valuation

This table compares Hilltop and MVB Financial’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hilltop	$1.57 billion	1.45	$109.65 million	$1.71	20.36
MVB Financial	$209.53 million	1.53	$31.23 million	$1.87	13.32

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

Institutional & Insider Ownership

57.1% of Hilltop shares are held by institutional investors. Comparatively, 52.7% of MVB Financial shares are held by institutional investors. 28.9% of Hilltop shares are held by company insiders. Comparatively, 11.1% of MVB Financial 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.

Dividends

Hilltop pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. MVB Financial pays an annual dividend of $0.68 per share and has a dividend yield of 2.7%. Hilltop pays out 39.8% of its earnings in the form of a dividend. MVB Financial pays out 36.4% 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. MVB Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and target prices for Hilltop and MVB Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hilltop	0	1	0	0	2.00
MVB Financial	0	1	3	0	2.75

MVB Financial has a consensus price target of $25.25, suggesting a potential upside of 1.36%. Given MVB Financial’s stronger consensus rating and higher possible upside, analysts plainly believe MVB Financial is more favorable than Hilltop.

Volatility and Risk

Hilltop has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, MVB Financial has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500.

Summary

MVB Financial beats Hilltop on 10 of the 16 factors compared between the two stocks.

About Hilltop

Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.

About MVB Financial

MVB Financial Corp. operates as bank holding company for MVB Bank, Inc that provides financial services to individuals and corporate clients. The company operates through three segments: CoRe Banking, Mortgage Banking, and The Financial Holding Company. It offers various demand deposit accounts, savings accounts, money market accounts, and certificates of deposit; and commercial, consumer, and real estate mortgage loans, as well as lines of credit. The company also provides debit cards; cashier's checks; safe deposit rental facilities; and non-deposit investment services, as well as financial technology (Fintech) banking services. In addition, it offers fintech solutions for the gaming, payments, banking-as-a-service, and digital asset sectors; fraud prevention services for merchants, credit agencies, Fintech companies, and other vendors; and digital products and web and mobile applications for forward-thinking community banks, credit unions, digital banks, and Fintech companies. It operates full-service branches in West Virginia and Virginia. MVB Financial Corp. was founded in 1997 and is based in Fairmont, West Virginia.