Critical Survey: QCR (NASDAQ:QCRH) and First Western Financial (NASDAQ:MYFW)

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

Insider and Institutional Ownership

70.0% of QCR shares are owned by institutional investors. Comparatively, 60.3% of First Western Financial shares are owned by institutional investors. 3.2% of QCR shares are owned by company insiders. Comparatively, 13.1% of First Western Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for QCR and First Western Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
QCR	0	2	4	0	2.67
First Western Financial	0	1	1	1	3.00

QCR presently has a consensus price target of $101.00, suggesting a potential upside of 13.10%. First Western Financial has a consensus price target of $27.00, suggesting a potential downside of 7.09%. Given QCR’s higher probable upside, equities analysts plainly believe QCR is more favorable than First Western Financial.

Profitability

This table compares QCR and First Western Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
QCR	21.98%	12.65%	1.45%
First Western Financial	8.02%	5.74%	0.48%

Earnings & Valuation

This table compares QCR and First Western Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
QCR	$603.75 million	2.48	$127.19 million	$7.98	11.19
First Western Financial	$186.36 million	1.52	$13.19 million	$1.55	18.75

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

Risk and Volatility

QCR has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, First Western Financial has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Summary

QCR beats First Western Financial on 11 of the 15 factors compared between the two stocks.

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.

About First Western Financial

First Western Financial, Inc., a financial holding company, provides wealth advisory, private baking, personal trust, investment management, mortgage lending, and institutional asset management services. The company operates through two segments: Wealth Management and Mortgage. The Wealth Management segment provides deposit, loan, life insurance, and trust and investment management advisory products and services. The Mortgage segment engages in soliciting, originating, and selling mortgage loans into the secondary market. It serves entrepreneurs, professionals, high net worth individuals or families, and business and philanthropic organizations. First Western Financial, Inc. was incorporated in 2002 and is headquartered in Denver, Colorado.