Head-To-Head Analysis: Mid Penn Bancorp (NASDAQ:MPB) versus Southern Michigan Bancorp (OTCMKTS:SOMC)

Mid Penn Bancorp (NASDAQ:MPB) and Southern Michigan Bancorp (OTCMKTS:SOMC) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Earnings & Valuation

This table compares Mid Penn Bancorp and Southern Michigan Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mid Penn Bancorp	$309.08 million	2.41	$49.44 million	$2.44	13.27
Southern Michigan Bancorp	$84.61 million	1.34	$10.40 million	$2.58	9.50

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

Profitability

This table compares Mid Penn Bancorp and Southern Michigan Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mid Penn Bancorp	14.82%	8.25%	1.01%
Southern Michigan Bancorp	13.18%	10.82%	0.77%

Dividends

Mid Penn Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 2.7%. Southern Michigan Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 2.6%. Mid Penn Bancorp pays out 36.1% of its earnings in the form of a dividend. Southern Michigan Bancorp pays out 24.8% 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.

Analyst Recommendations

This is a breakdown of recent recommendations for Mid Penn Bancorp and Southern Michigan Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mid Penn Bancorp	0	1	1	0	2.50
Southern Michigan Bancorp	0	0	0	0	0.00

Mid Penn Bancorp currently has a consensus price target of $37.00, suggesting a potential upside of 14.27%. Given Mid Penn Bancorp’s stronger consensus rating and higher possible upside, equities analysts clearly believe Mid Penn Bancorp is more favorable than Southern Michigan Bancorp.

Volatility and Risk

Mid Penn Bancorp has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, Southern Michigan Bancorp has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500.

Institutional and Insider Ownership

43.1% of Mid Penn Bancorp shares are held by institutional investors. 8.1% of Mid Penn Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Mid Penn Bancorp beats Southern Michigan Bancorp on 13 of the 16 factors compared between the two stocks.

About Mid Penn Bancorp

Mid Penn Bancorp, Inc. operates as the bank holding company for Mid Penn Bank that provides commercial banking services to individuals, partnerships, non-profit organizations, and corporations. The company offers various time and demand deposit products, including checking accounts, savings accounts, clubs, money market deposit accounts, certificates of deposit, and individual retirement accounts. It also provides a range of loan products comprising mortgage and home equity loans, secured and unsecured commercial and consumer loans, lines of credit, construction financing, farm loans, community development loans, loans to non-profit entities, and local government loans. In addition, the company offers trust, retail investment, wealth management, and insurance services; and provides online banking, telephone banking, cash management, and automated teller services, as well as safe deposit boxes. The company was founded in 1868 and is headquartered in Harrisburg, Pennsylvania.

About Southern Michigan Bancorp

Southern Michigan Bancorp, Inc. operates as the bank holding company for Southern Michigan Bank & Trust that provides a range of commercial banking services to individuals, businesses, institutions, and governmental agencies primarily in the southwest Michigan communities. Its deposit products include interest and non-interest checking, savings, and various types of money market accounts; time, savings, and demand deposits; and certificates of deposit and IRAs. The company also provides home mortgages and equity loans, home equity lines of credit, VA and FHA home loans, USDA rural development loans, and auto/personal loans; business loans, such as lines of credit, term loans, commercial real estate loans, commercial and industrial loans, agriculture loans, letters of credit, small business administration loans, and capital access loans; industrial, construction, real estate, and inventory loans; and consumer lending products comprising direct and indirect loans to purchasers of residential real property and consumer goods. In addition, it offers trust and investment services that include investment management, trustee, IRA rollovers and retirement plan, institutional and personal custody, estate settlement, wealth management, estate and wealth transfer planning assistance, charitable gift planning assistance, and cash management custody services; and safe deposit box and automated teller machine services. Further, the company provides bill pay, e-statements, ACH, wire transfer, remote deposit capture, and insurance services, as well as ATM, debit, credit, and gift cards. The company was founded in 1871 and is based in Coldwater, Michigan.