Critical Analysis: MetroCity Bankshares (NASDAQ:MCBS) vs. National Bankshares (NASDAQ:NKSH)

MetroCity Bankshares (NASDAQ:MCBS) and National Bankshares (NASDAQ:NKSH) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.

Volatility & Risk

MetroCity Bankshares has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.

Dividends

MetroCity Bankshares pays an annual dividend of $1.16 per share and has a dividend yield of 3.6%. National Bankshares pays an annual dividend of $1.56 per share and has a dividend yield of 4.4%. MetroCity Bankshares pays out 41.9% of its earnings in the form of a dividend. National Bankshares pays out 56.7% 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.

Profitability

This table compares MetroCity Bankshares and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MetroCity Bankshares	28.16%	15.72%	1.87%
National Bankshares	20.39%	10.53%	1.03%

Earnings & Valuation

This table compares MetroCity Bankshares and National Bankshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MetroCity Bankshares	$246.01 million	3.73	$68.53 million	$2.77	11.55
National Bankshares	$58.05 million	3.93	$15.83 million	$2.75	13.01

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

Analyst Recommendations

This is a summary of recent ratings and target prices for MetroCity Bankshares and National Bankshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MetroCity Bankshares	0	1	1	0	2.50
National Bankshares	0	0	1	1	3.50

MetroCity Bankshares presently has a consensus target price of $33.00, suggesting a potential upside of 3.16%. Given MetroCity Bankshares’ higher possible upside, analysts clearly believe MetroCity Bankshares is more favorable than National Bankshares.

Insider and Institutional Ownership

25.3% of MetroCity Bankshares shares are held by institutional investors. Comparatively, 29.7% of National Bankshares shares are held by institutional investors. 27.5% of MetroCity Bankshares shares are held by insiders. Comparatively, 3.3% of National Bankshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

MetroCity Bankshares beats National Bankshares on 9 of the 16 factors compared between the two stocks.

About MetroCity Bankshares

MetroCity Bankshares, Inc. operates as the bank holding company for Metro City Bank that engages in the provision of banking products and services in the United States. It offers customary banking services, such as consumer and commercial checking accounts, savings, and money market accounts, as well as certificates of deposit. The company also provides commercial and consumer loans, including single family residential loans; construction and development, and owner and non-owner occupied commercial real estate loans; letters of credit; and commercial and industrial loans, residential mortgage loans, and SBA loans. In addition, it offers online banking services, which include access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions, such as remote check deposit with mobile bill pay; and automated teller machines and telephone banking services. Further, it provides debit cards for checking customers, direct deposits, and cashier's checks; treasury management services, including wire transfer, automated clearing house, and stop payments services; and cash management deposit products, such as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company was founded in 2006 and is headquartered in Atlanta, Georgia.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.