Critical Contrast: Merchants Bancorp (NASDAQ:MBIN) versus Oxford Bank (OTCMKTS:OXBC)

Oxford Bank (OTCMKTS:OXBC) and Merchants Bancorp (NASDAQ:MBIN) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Oxford Bank and Merchants Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oxford Bank	0	0	0	0	0.00
Merchants Bancorp	0	2	3	0	2.60

Merchants Bancorp has a consensus price target of $50.00, indicating a potential upside of 0.99%. Given Merchants Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Merchants Bancorp is more favorable than Oxford Bank.

Institutional & Insider Ownership

4.5% of Oxford Bank shares are owned by institutional investors. Comparatively, 24.6% of Merchants Bancorp shares are owned by institutional investors. 44.9% of Merchants Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Oxford Bank and Merchants Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oxford Bank	$62.26 million	1.75	$10.96 million	$3.92	11.22
Merchants Bancorp	$706.21 million	3.22	$218.77 million	$4.10	12.08

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

Profitability

This table compares Oxford Bank and Merchants Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oxford Bank	15.06%	N/A	N/A
Merchants Bancorp	16.64%	13.40%	1.17%

Risk & Volatility

Oxford Bank has a beta of 0.08, suggesting that its share price is 92% less volatile than the S&P 500. Comparatively, Merchants Bancorp has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.

Summary

Merchants Bancorp beats Oxford Bank on 14 of the 14 factors compared between the two stocks.

About Oxford Bank

Oxford Bank Corporation provides banking products and services to various customers in Michigan. Its deposit products include savings, checking, and individual retirement accounts, as well as certificates of deposit. The company's loan portfolio comprises home mortgage, home equity, auto, student, term, commercial real estate, and small business administration loans, as well as lines of credit. It also offers cash management, merchant card, remote deposit capture, payroll, overdraft protection, wire transfer, night depository, and notary services, as well as safe deposit box and interactive teller machine services; online, telephone, and mobile banking services; debit and credit cards; and insurance products. The company operates its branches in Clarkston, Davison, Dryden, Lake Orion, Ortonville, Oxford, and Oakland. Oxford Bank Corporation was founded in 1884 and is based in Oxford, Michigan.

About Merchants Bancorp

Merchants Bancorp operates as the diversified bank holding company in the United States. It operates through three segments: Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The Multi-family Mortgage Banking segment engages in the mortgage banking, which originates and services government sponsored mortgages, including bridge financing products to refinance, acquire, or reposition multi-family housing projects, and construction lending for multi-family and healthcare facilities. This segment also offers customized loan products for need-based skilled nursing facilities, such as independent living, assisted living, and memory care; and tax credit equity syndicator service. The Mortgage Warehousing segment funds agency eligible residential loans, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, which includes retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and small business administration lending. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.