Head-To-Head Review: Ames National (NASDAQ:ATLO) versus First Western Financial (NASDAQ:MYFW)

First Western Financial (NASDAQ:MYFW) and Ames National (NASDAQ:ATLO) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.

Institutional and Insider Ownership

60.3% of First Western Financial shares are owned by institutional investors. Comparatively, 26.5% of Ames National shares are owned by institutional investors. 15.5% of First Western Financial shares are owned by company insiders. Comparatively, 2.1% of Ames National shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

First Western Financial has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Ames National has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for First Western Financial and Ames National, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Western Financial	0	3	2	0	2.40
Ames National	0	0	1	0	3.00

First Western Financial currently has a consensus target price of $24.33, indicating a potential downside of 6.80%. Given First Western Financial’s higher probable upside, analysts plainly believe First Western Financial is more favorable than Ames National.

Valuation and Earnings

This table compares First Western Financial and Ames National”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Western Financial	$96.09 million	2.64	$8.47 million	$1.29	20.24
Ames National	$62.90 million	3.25	$10.22 million	$1.80	12.79

Ames National has lower revenue, but higher earnings than First Western Financial. Ames National is trading at a lower price-to-earnings ratio than First Western Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares First Western Financial and Ames National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Western Financial	6.91%	4.91%	0.42%
Ames National	16.68%	8.53%	0.75%

About First Western Financial

First Western Financial, Inc., a financial holding company, provides wealth advisory, private baking, personal trust, investment management, mortgage lending, and institutional asset management services. The company operates through two segments: Wealth Management and Mortgage. The Wealth Management segment provides deposit, loan, life insurance, and trust and investment management advisory products and services. The Mortgage segment engages in soliciting, originating, and selling mortgage loans into the secondary market. It serves entrepreneurs, professionals, high net worth individuals or families, and business and philanthropic organizations. First Western Financial, Inc. was incorporated in 2002 and is headquartered in Denver, Colorado.

About Ames National

Ames National Corporation operates as a multi-bank holding company that provides banking products and services primarily in Boone, Clarke, Hancock, Marshall, Polk, Story, and Union counties in central, north central, and south-central Iowa. The company accepts various deposit products, including checking and savings accounts; and time deposits, such as money market accounts and certificates of deposit. It also provides loans, such as short-term and medium-term commercial and agricultural real estate, residential real estate loans, equipment, vehicle, and home improvement loans; consumer loans to finance consumer purchases, such as automobiles, trucks, recreational vehicles, household furnishings, boats, personal loans, and lines of credit; agricultural and business operating loans and lines of credit; and originates mortgage loans for sale into the secondary market. In addition, the company offers cash management, merchant credit card processing, safe deposit box, wire transfer, direct deposit, and automated/video teller machine access services; and automatic drafts for various accounts, as well as wealth management services. Further, it provides farm management, investment, and custodial services for individuals, businesses, and non-profit organizations; and online, mobile, and private banking services. Ames National Corporation was incorporated in 1903 and is headquartered in Ames, Iowa.