MetroCity Bankshares (NASDAQ:MCBS) & City (NASDAQ:CHCO) Critical Contrast

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

Valuation and Earnings

This table compares MetroCity Bankshares and City”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MetroCity Bankshares	$246.01 million	3.79	$68.53 million	$2.77	11.73
City	$398.98 million	4.42	$130.49 million	$9.08	13.52

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

Insider & Institutional Ownership

25.3% of MetroCity Bankshares shares are held by institutional investors. Comparatively, 72.4% of City shares are held by institutional investors. 27.5% of MetroCity Bankshares shares are held by company insiders. Comparatively, 1.8% of City shares are held by company 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.

Profitability

This table compares MetroCity Bankshares and City’s 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%
City	32.72%	16.58%	1.96%

Analyst Recommendations

This is a summary of current recommendations for MetroCity Bankshares and City, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MetroCity Bankshares	0	1	1	0	2.50
City	0	5	1	0	2.17

MetroCity Bankshares currently has a consensus price target of $33.00, indicating a potential upside of 1.57%. City has a consensus price target of $134.25, indicating a potential upside of 9.39%. Given City’s higher possible upside, analysts clearly believe City is more favorable than MetroCity Bankshares.

Dividends

MetroCity Bankshares pays an annual dividend of $1.16 per share and has a dividend yield of 3.6%. City pays an annual dividend of $3.48 per share and has a dividend yield of 2.8%. MetroCity Bankshares pays out 41.9% of its earnings in the form of a dividend. City pays out 38.3% 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. City has increased its dividend for 6 consecutive years.

Volatility & Risk

MetroCity Bankshares has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, City has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500.

Summary

City beats MetroCity Bankshares on 12 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 City

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust, and investment management, and other financial solutions in the United States. The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; home equity lines of credit; amortized home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts, as well as owner-occupied real estate and construction, land development, and lines of credit. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government-insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.