Head to Head Comparison: Eagle Financial Services (NASDAQ:EFSI) & MetroCity Bankshares (NASDAQ:MCBS)

Eagle Financial Services (NASDAQ:EFSI) and MetroCity Bankshares (NASDAQ:MCBS) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Insider & Institutional Ownership

0.3% of Eagle Financial Services shares are owned by institutional investors. Comparatively, 25.3% of MetroCity Bankshares shares are owned by institutional investors. 8.7% of Eagle Financial Services shares are owned by company insiders. Comparatively, 27.5% of MetroCity Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Eagle Financial Services and MetroCity Bankshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Financial Services	0	2	2	0	2.50
MetroCity Bankshares	0	2	0	0	2.00

Eagle Financial Services presently has a consensus target price of $42.25, suggesting a potential upside of 8.84%. MetroCity Bankshares has a consensus target price of $31.00, suggesting a potential upside of 6.71%. Given Eagle Financial Services’ stronger consensus rating and higher possible upside, equities analysts clearly believe Eagle Financial Services is more favorable than MetroCity Bankshares.

Profitability

This table compares Eagle Financial Services and MetroCity Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Financial Services	7.76%	9.99%	0.92%
MetroCity Bankshares	27.93%	15.73%	1.89%

Risk & Volatility

Eagle Financial Services has a beta of 0.2, meaning that its stock price is 80% less volatile than the S&P 500. Comparatively, MetroCity Bankshares has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Valuation and Earnings

This table compares Eagle Financial Services and MetroCity Bankshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Financial Services	$105.89 million	1.97	$8.21 million	$1.30	29.86
MetroCity Bankshares	$155.63 million	4.76	$68.71 million	$2.63	11.05

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

Dividends

Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 3.2%. MetroCity Bankshares pays an annual dividend of $1.00 per share and has a dividend yield of 3.4%. Eagle Financial Services pays out 95.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MetroCity Bankshares pays out 38.0% of its earnings in the form of a dividend. Eagle Financial Services has increased its dividend for 14 consecutive years. MetroCity Bankshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

MetroCity Bankshares beats Eagle Financial Services on 12 of the 17 factors compared between the two stocks.

About Eagle Financial Services

Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke County that provides various retail and commercial banking products and services in the Shenandoah Valley and Northern Virginia. The company’s deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers personal and retirement plan services; investment services comprising tax-deferred annuities, IRAs and rollovers, mutual funds, retirement plans, college savings plans, life insurance, long term care insurance, fixed income investing, brokerage CDs, and full service or discount brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through twelve full-service branches, two loan production offices, one wealth management office, and one drive-through only facility, as well as 13 ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, Virginia.

About MetroCity Bankshares

MetroCity Bankshares, Inc. operates as the bank holding company for Metro City Bank that engages in the provision of banking products and services in the United States. It offers customary banking services, such as consumer and commercial checking accounts, savings, and money market accounts, as well as certificates of deposit. The company also provides commercial and consumer loans, including single family residential loans; construction and development, and owner and non-owner occupied commercial real estate loans; letters of credit; and commercial and industrial loans, residential mortgage loans, and SBA loans. In addition, it offers online banking services, which include access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions, such as remote check deposit with mobile bill pay; and automated teller machines and telephone banking services. Further, it provides debit cards for checking customers, direct deposits, and cashier's checks; treasury management services, including wire transfer, automated clearing house, and stop payments services; and cash management deposit products, such as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company was founded in 2006 and is headquartered in Atlanta, Georgia.