QCR (QCRH) and Guaranty Federal Bancshares (GFED) Financial Contrast

QCR (NASDAQ: QCRH) and Guaranty Federal Bancshares (NASDAQ:GFED) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Analyst Ratings

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This is a breakdown of current recommendations and price targets for QCR and Guaranty Federal Bancshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QCR 0 0 5 0 3.00
Guaranty Federal Bancshares 0 0 1 0 3.00

QCR currently has a consensus target price of $53.60, suggesting a potential upside of 18.98%. Guaranty Federal Bancshares has a consensus target price of $25.00, suggesting a potential upside of 6.56%. Given QCR’s higher probable upside, analysts plainly believe QCR is more favorable than Guaranty Federal Bancshares.

Valuation and Earnings

This table compares QCR and Guaranty Federal Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
QCR $166.00 million 3.78 $35.70 million $2.66 16.94
Guaranty Federal Bancshares $35.17 million 2.96 $5.15 million $1.46 16.07

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

Institutional & Insider Ownership

61.0% of QCR shares are owned by institutional investors. Comparatively, 25.9% of Guaranty Federal Bancshares shares are owned by institutional investors. 8.8% of QCR shares are owned by company insiders. Comparatively, 10.0% of Guaranty Federal Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk & Volatility

QCR has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500. Comparatively, Guaranty Federal Bancshares has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500.

Dividends

QCR pays an annual dividend of $0.24 per share and has a dividend yield of 0.5%. Guaranty Federal Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 2.0%. QCR pays out 9.0% of its earnings in the form of a dividend. Guaranty Federal Bancshares pays out 32.9% 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.

Profitability

This table compares QCR and Guaranty Federal Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
QCR 21.51% 11.58% 1.01%
Guaranty Federal Bancshares 15.44% 8.77% 0.85%

Summary

QCR beats Guaranty Federal Bancshares on 13 of the 15 factors compared between the two stocks.

QCR Company Profile

QCR Holdings, Inc., a multi-bank holding company, provides commercial and consumer banking, and trust and asset management services. The company operates through Commercial Banking and Wealth Management segments. Its deposit products include noninterest and interest-bearing demand, time, and brokered time deposits. The company also provides various commercial and retail lending/leasing, and investment services to corporations, partnerships, individuals, and government agencies. Its 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, the company engages in leasing machinery and equipment to commercial and industrial businesses under direct financing lease contracts; and issuing various trust preferred securities. It serves the Quad Cities, Cedar Rapids, Waterloo/Cedar Falls, Des Moines/Ankeny, and Rockford communities. The company was founded in 1993 and is headquartered in Moline, Illinois.

Guaranty Federal Bancshares Company Profile

Guaranty Federal Bancshares, Inc. operates as the bank holding company for Guaranty Bank that provides banking products and services in the southwestern corner of Missouri. The company's deposit products include checking accounts, money market accounts, savings accounts, fixed-term certificates of deposit, and individual retirement accounts, as well as demand deposits and NOW accounts. Its loan portfolio comprises commercial real estate loans, one-to four-family mortgage loans, multi-family residential mortgage loans, and construction loans; and consumer and other loans, such as loans secured by certificates of deposit, automobile loans, boat loans, and home equity loans, as well as business loans. As of April 18, 2017, the company had nine full-service branches in Greene and Christian Counties; and loan production offices in Jasper and Webster Counties. It also provides access to approximately 24,000 ATMs. Guaranty Federal Bancshares, Inc. was founded in 1913 and is based in Springfield, Missouri.

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