Contrasting QCR (NASDAQ:QCRH) and Bank Of Montreal (NYSE:BMO)

Bank Of Montreal (NYSE:BMO) and QCR (NASDAQ:QCRH) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Volatility and Risk

Bank Of Montreal has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, QCR has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500.

Profitability

This table compares Bank Of Montreal and QCR’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank Of Montreal	11.72%	13.60%	0.71%
QCR	22.86%	12.87%	1.50%

Valuation & Earnings

This table compares Bank Of Montreal and QCR”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank Of Montreal	$55.92 billion	2.17	$6.22 billion	$8.86	19.71
QCR	$603.75 million	2.71	$127.19 million	$8.46	11.82

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Bank Of Montreal and QCR, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank Of Montreal	1	6	5	0	2.33
QCR	0	3	4	0	2.57

Bank Of Montreal currently has a consensus target price of $163.00, suggesting a potential downside of 6.66%. QCR has a consensus target price of $108.40, suggesting a potential upside of 8.42%. Given QCR’s stronger consensus rating and higher probable upside, analysts plainly believe QCR is more favorable than Bank Of Montreal.

Institutional & Insider Ownership

45.8% of Bank Of Montreal shares are owned by institutional investors. Comparatively, 70.0% of QCR shares are owned by institutional investors. 1.0% of Bank Of Montreal shares are owned by insiders. Comparatively, 3.2% of QCR shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Bank Of Montreal pays an annual dividend of $4.81 per share and has a dividend yield of 2.8%. QCR pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. Bank Of Montreal pays out 54.3% of its earnings in the form of a dividend. QCR pays out 4.7% 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. Bank Of Montreal has raised its dividend for 4 consecutive years. Bank Of Montreal is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Bank Of Montreal beats QCR on 9 of the 17 factors compared between the two stocks.

About Bank Of Montreal

Bank of Montreal provides diversified financial services primarily in North America. It operates through Canadian P&C, U.S P&C, BMO Wealth Management, and BMO Capital Markets segments. The company’s personal banking products and services include deposits, mortgages, home lending, consumer credit, small business lending, credit cards, cash management, financial and investment advice, and other banking services; and commercial banking products and services comprise various of financing options and treasury and payment solutions, as well as risk management products. It also offers investing, banking, and wealth management advisory; digital investing services; financial solutions for individuals, families, and businesses; provides investment management services to institutional, retail, and high net worth investors; and diversified insurance, and wealth and pension de-risking solutions. In addition, the company provides individual life, critical illness and annuity products, as well as segregated funds, and group creditor and travel insurance to customers; debt and equity capital-raising, loan origination and syndication, balance sheet management, treasury management, mergers and acquisitions advice, restructurings and recapitalizations, trade finance, and risk mitigation services, as well as a range of banking and other operating services. Further, the company offers research and access to financial markets for institutional, corporate and retail clients through an integrated suite of sales and trading solutions related to debt, foreign exchange, interest rates, credit, equities, securitization, and commodities; provides new product development and origination services, as well as risk management and advisory services for hedging strategies, including in interest rates, foreign exchange rates and commodities prices; and funding and liquidity management services. The company was founded in 1817 and is headquartered in Montreal, Canada.

About QCR

QCR Holdings, Inc., a multi-bank holding company, provides commercial and consumer banking, and trust and asset management services. The company’s deposit products include noninterest-bearing demand, interest-bearing demand, time, and brokered deposits. It also provides various commercial and retail lending/leasing, and investment services to corporations, partnerships, individuals, and government agencies. The company’s loan portfolio comprises loans to small and mid-sized businesses; business loans, including lines of credit for working capital and operational purposes; term loans for the acquisition of facilities, equipment, and other purposes; commercial and residential real estate loans; and installment and other consumer loans, such as home improvement, home equity, motor vehicle, and signature loans, as well as small personal credit lines. In addition, it engages in leasing of machinery and equipment to commercial and industrial businesses under direct financing lease contracts; and issuance of trust preferred securities. QCR Holdings, Inc. was incorporated in 1993 and is headquartered in Moline, Illinois.