International Bancshares (NASDAQ:IBOC) vs. Ames National (NASDAQ:ATLO) Critical Comparison

International Bancshares (NASDAQ:IBOC) and Ames National (NASDAQ:ATLO) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Earnings & Valuation

This table compares International Bancshares and Ames National”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Bancshares	$1.06 billion	4.18	$412.29 million	$6.63	10.70
Ames National	$98.26 million	2.90	$19.03 million	$2.58	12.45

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

Profitability

This table compares International Bancshares and Ames National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
International Bancshares	38.83%	12.67%	2.47%
Ames National	22.64%	11.08%	1.08%

Dividends

International Bancshares pays an annual dividend of $1.46 per share and has a dividend yield of 2.1%. Ames National pays an annual dividend of $0.96 per share and has a dividend yield of 3.0%. International Bancshares pays out 22.0% of its earnings in the form of a dividend. Ames National pays out 37.2% 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. International Bancshares has increased its dividend for 16 consecutive years.

Insider & Institutional Ownership

65.9% of International Bancshares shares are owned by institutional investors. Comparatively, 26.5% of Ames National shares are owned by institutional investors. 13.1% of International Bancshares shares are owned by company insiders. Comparatively, 2.3% of Ames National 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.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for International Bancshares and Ames National, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Bancshares	0	0	1	0	3.00
Ames National	0	2	1	0	2.33

International Bancshares currently has a consensus target price of $85.00, suggesting a potential upside of 19.84%. Ames National has a consensus target price of $31.00, suggesting a potential downside of 3.52%. Given International Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe International Bancshares is more favorable than Ames National.

Volatility and Risk

International Bancshares has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Ames National has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500.

Summary

International Bancshares beats Ames National on 14 of the 16 factors compared between the two stocks.

About International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services in Texas and the State of Oklahoma. It accepts checking and saving deposits; and offers commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The company also provides international banking services, including letters of credit, commercial and industrial loans, and foreign exchange services. In addition, it offers other banking related services, such as credit cards, safety deposit boxes, collection, notary public, escrow, drive up and walk up facilities, and other customary banking services; and Internet banking services, as well as securities products through third party providers. The company was founded in 1966 and is headquartered in Laredo, Texas.

About Ames National

Ames National Corporation operates as a multi-bank holding company that provides banking products and services primarily in Boone, Clarke, Hancock, Marshall, Polk, Story, and Union counties in central, north central, and south-central Iowa. The company accepts various deposit products, including checking and savings accounts; and time deposits, such as money market accounts and certificates of deposit. It also provides loans, such as short-term and medium-term commercial and agricultural real estate, residential real estate loans, equipment, vehicle, and home improvement loans; consumer loans to finance consumer purchases, such as automobiles, trucks, recreational vehicles, household furnishings, boats, personal loans, and lines of credit; agricultural and business operating loans and lines of credit; and originates mortgage loans for sale into the secondary market. In addition, the company offers cash management, merchant credit card processing, safe deposit box, wire transfer, direct deposit, and automated/video teller machine access services; and automatic drafts for various accounts, as well as wealth management services. Further, it provides farm management, investment, and custodial services for individuals, businesses, and non-profit organizations; and online, mobile, and private banking services. Ames National Corporation was incorporated in 1903 and is headquartered in Ames, Iowa.