Financial Contrast: QCR (NASDAQ:QCRH) versus Enterprise Financial Services (NASDAQ:EFSC)

QCR (NASDAQ:QCRH) and Enterprise Financial Services (NASDAQ:EFSC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Profitability

This table compares QCR and Enterprise Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
QCR	22.86%	13.00%	1.50%
Enterprise Financial Services	18.72%	9.73%	1.11%

Institutional and Insider Ownership

70.0% of QCR shares are held by institutional investors. Comparatively, 72.2% of Enterprise Financial Services shares are held by institutional investors. 3.2% of QCR shares are held by insiders. Comparatively, 2.2% of Enterprise Financial Services shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

QCR pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. Enterprise Financial Services pays an annual dividend of $1.36 per share and has a dividend yield of 2.1%. QCR pays out 4.7% of its earnings in the form of a dividend. Enterprise Financial Services pays out 25.7% 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. Enterprise Financial Services has raised its dividend for 11 consecutive years. Enterprise Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

QCR has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Enterprise Financial Services has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for QCR and Enterprise Financial Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
QCR	0	2	4	0	2.67
Enterprise Financial Services	0	1	4	0	2.80

QCR presently has a consensus target price of $102.50, indicating a potential upside of 2.35%. Enterprise Financial Services has a consensus target price of $69.75, indicating a potential upside of 5.70%. Given Enterprise Financial Services’ stronger consensus rating and higher possible upside, analysts clearly believe Enterprise Financial Services is more favorable than QCR.

Earnings and Valuation

This table compares QCR and Enterprise Financial Services”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
QCR	$387.04 million	4.27	$127.19 million	$8.46	11.84
Enterprise Financial Services	$1.00 billion	2.41	$201.37 million	$5.30	12.45

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

Summary

Enterprise Financial Services beats QCR on 9 of the 16 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 Enterprise Financial Services

Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers primarily in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico. It provides checking, savings, money market accounts, and certificates of deposit. The company also provides commercial and industrial, commercial real estate, real estate construction and development, residential real estate, small business administration, agricultural, consumer, and other loan products. In addition, it offers treasury management and international trade services; tax credit brokerage services; life insurance premium and sponsor finance; tax credit related lending; other deposit accounts, such as community associations, property management, third party escrow, and trust services; treasury management product and services; customized solutions and products; cash management; fiduciary, investment management, and financial advisory services; and customer hedging products, including international banking, card services, and tax credit businesses. Further, the company provides online, device applications, text, and voice banking; remote deposit capture; internet banking, mobile banking, cash management, positive pay services, fraud detection and prevention, automated payables, check image, and statement and document imaging; and controlled disbursements, repurchase agreements, and sweep investment accounts. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.