Contrasting Bank of Communications (OTCMKTS:BCMXY) & MainStreet Bank (NASDAQ:MNSB)

MainStreet Bank (NASDAQ:MNSB) and Bank of Communications (OTCMKTS:BCMXY) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.

Volatility & Risk

MainStreet Bank has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, Bank of Communications has a beta of -0.03, suggesting that its share price is 103% less volatile than the S&P 500.

Valuation & Earnings

This table compares MainStreet Bank and Bank of Communications”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MainStreet Bank	$135.62 million	1.30	$15.61 million	$2.04	12.17
Bank of Communications	$71.22 billion	1.10	$13.30 billion	$3.61	7.29

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for MainStreet Bank and Bank of Communications, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MainStreet Bank	0	1	1	0	2.50
Bank of Communications	0	1	0	0	2.00

Profitability

This table compares MainStreet Bank and Bank of Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MainStreet Bank	13.24%	9.16%	0.79%
Bank of Communications	19.23%	7.91%	0.64%

Dividends

MainStreet Bank pays an annual dividend of $0.40 per share and has a dividend yield of 1.6%. Bank of Communications pays an annual dividend of $0.97 per share and has a dividend yield of 3.7%. MainStreet Bank pays out 19.6% of its earnings in the form of a dividend. Bank of Communications pays out 26.9% 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.

Institutional and Insider Ownership

52.3% of MainStreet Bank shares are owned by institutional investors. 10.2% of MainStreet Bank shares are owned by 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.

Summary

MainStreet Bank beats Bank of Communications on 10 of the 15 factors compared between the two stocks.

About MainStreet Bank

MainStreet Bancshares, Inc. operates as the bank holding company for MainStreet Bank that provides various banking products and services for individuals, small to medium-sized businesses, and professional service organizations. The company offers demand, NOW, money market, savings, and sweep accounts, as well as certificates of deposit; business and consumer checking, interest-bearing checking, business account analysis, and other depository services; and cash management, wire transfer, check imaging, bill pay, remote deposit capture, and courier services. It also provides commercial loans, include government contract receivables, plant and equipment, general working capital, contract administration, and acquisition loans; commercial real estate, real estate construction, and residential real estate loans; and consumer loans comprising term loans and overdraft protection, as well as debit and credit cards. In addition, the company offers deposit insurance solutions; remote deposit of checks; and internet bill payment, online cash management, and online and mobile banking services. It operates in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington D.C., as well as automated teller machines. The company was incorporated in 2003 and is headquartered in Fairfax, Virginia.

About Bank of Communications

Bank of Communications Co., Ltd. provides commercial banking products and services in China. The company offers savings deposit products, including demand deposits, lump-sum deposits and withdrawal, time deposit of small savings for lump-sum withdrawal, interest withdrawal on principal deposited, time-demand deposit, call deposit, swap management, and education deposit; personal certificate of deposit; salary financing A; and foreign currency deposit. It also provides credit, quasi-credit, and debit cards; new housing and second-hand mortgage loans and unsecured personal loans; personal wealth management advisor services; and precious metal and commodity trading services. In addition, the company offers corporate structured deposit and corporate certificate of deposit; corporate cash management; industrial chain finance program comprising prepayment financing, inventory financing, accounts receivable financing and accounts payable financing; syndicated loans; corporation overdraft; investment banking services; and offshore banking services, such as repayment financing, inventory financing, accounts receivable financing and accounts payable financing, and forex currencies. Further, it provides bond account activation, bond distribution, and transaction services; related bond escrow and settlement, pledge registration, and principal and interest payment services; training and consulting services for cooperative banks; cross-border inter-bank payments system services; consignment sales of precious metal products; bond underwriting distribution; third party bond depository services; bank derivatives transfer; b-share transfer; bankfutures transfer; standard warehouse warrant pledged financing; institutional investment consulting, wealth management, and insurance services; and clearing and settlement services for future markets. The company was founded in 1908 and is headquartered in Shanghai, the People’s Republic of China.