Head-To-Head Comparison: Wintrust Financial (NASDAQ:WTFC) vs. Midland States Bancorp (NASDAQ:MSBI)

Midland States Bancorp (NASDAQ:MSBI) and Wintrust Financial (NASDAQ:WTFC) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Midland States Bancorp and Wintrust Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Midland States Bancorp	-2.74%	-1.95%	-0.17%
Wintrust Financial	17.52%	12.60%	1.13%

Earnings & Valuation

This table compares Midland States Bancorp and Wintrust Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Midland States Bancorp	$489.48 million	0.88	-$13.43 million	($1.05)	-19.07
Wintrust Financial	$3.97 billion	2.22	$695.04 million	$10.31	12.84

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Midland States Bancorp and Wintrust Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Midland States Bancorp	0	4	0	0	2.00
Wintrust Financial	0	2	9	2	3.00

Midland States Bancorp presently has a consensus target price of $23.50, indicating a potential upside of 17.38%. Wintrust Financial has a consensus target price of $133.69, indicating a potential upside of 0.98%. Given Midland States Bancorp’s higher possible upside, research analysts clearly believe Midland States Bancorp is more favorable than Wintrust Financial.

Volatility and Risk

Midland States Bancorp has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Wintrust Financial has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Dividends

Midland States Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 6.2%. Wintrust Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.5%. Midland States Bancorp pays out -118.1% of its earnings in the form of a dividend. Wintrust Financial pays out 19.4% 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. Wintrust Financial has increased its dividend for 12 consecutive years. Midland States Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

60.9% of Midland States Bancorp shares are held by institutional investors. Comparatively, 93.5% of Wintrust Financial shares are held by institutional investors. 5.6% of Midland States Bancorp shares are held by insiders. Comparatively, 1.5% of Wintrust Financial shares are held 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

Wintrust Financial beats Midland States Bancorp on 14 of the 18 factors compared between the two stocks.

About Midland States Bancorp

Midland States Bancorp, Inc. operates as a financial holding company for Midland States Bank that provides various banking products and services to individuals, businesses, municipalities, and other entities. It operates through Banking, Wealth Management, and Other segments. The company provides a range of financial products and services to consumers and businesses, including commercial loans to finance agricultural equipment and production; and commercial real estate loans for owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties, and assisted living facilities. In addition, it offers construction and land development loans, such as real estate investment properties and residential developments, and lesser extent loans; and residential real estate loans, which includes first and second mortgage loans, and home equity lines of credit consisting of loans secured by first or second mortgages on primarily owner occupied primary residences. The company also provides consumer installment loans for the purchase of cars, boats and other recreational vehicles, as well as for the purchase of major appliances and other home improvement projects; and commercial equipment leasing programs for manufacturing, construction, transportation, and healthcare industries. Further, it offers merchant services; deposit products, including checking, time, savings, money market, and certificates of deposit, as well as sweep accounts; letters of credit; and trust and wealth management services, such as financial and estate planning, trustee and custodial, investment management, tax, insurance, and business planning, corporate retirement plan consulting and administration, and retail brokerage services. The company was founded in 1881 and is headquartered in Effingham, Illinois.

About Wintrust Financial

Wintrust Financial Corporation operates as a financial holding company. It operates in three segments: Community Banking, Specialty Finance, and Wealth Management. The Community Banking segment offers non-interest bearing deposits, non-brokered interest-bearing transaction accounts, and savings and domestic time deposits; home equity, consumer, and real estate loans; safe deposit facilities; and automatic teller machine (ATM), online and mobile banking, and other services. It also engages in the retail origination and purchase of residential mortgages; and provision of lending, deposits, and treasury management services to condominium, homeowner, and community associations, as well as asset-based lending for middle-market companies. In addition, this segment offers loan and deposit services to mortgage brokerage companies; lending to restaurant franchisees; direct leasing; small business administration loans; commercial mortgages and construction loans; and financial solutions. It provides personal and commercial banking services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional clients. The Specialty Finance segment offers commercial and life insurance premiums financing for businesses and individuals; accounts receivable financing, value-added, and out-sourced administrative services; other specialty finance services; equipment financing through structured loan and lease products; and property and casualty premium financing; as well as data processing of payrolls, billing, and cash management services to temporary staffing industry. The Wealth Management segment provides wealth management services, such as trust and investment, asset management, tax-deferred exchange, securities brokerage, and retirement plan services. Wintrust Financial Corporation was founded in 1991 and is headquartered in Rosemont, Illinois.