MidSouth Bancorp (NYSE: MSL) and Shinhan Financial Group (NYSE:SHG) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Dividends

MidSouth Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Shinhan Financial Group pays an annual dividend of $1.03 per share and has a dividend yield of 2.4%. MidSouth Bancorp pays out -14.8% of its earnings in the form of a dividend. Shinhan Financial Group pays out 9.0% 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.

Earnings and Valuation

This table compares MidSouth Bancorp and Shinhan Financial Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MidSouth Bancorp $102.40 million 2.21 -$11.76 million ($0.27) -50.56
Shinhan Financial Group $15.37 billion 1.32 $2.58 billion $11.46 3.74

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

Analyst Recommendations

This is a summary of current ratings and price targets for MidSouth Bancorp and Shinhan Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MidSouth Bancorp 0 2 3 0 2.60
Shinhan Financial Group 0 0 0 0 N/A

MidSouth Bancorp presently has a consensus target price of $14.00, indicating a potential upside of 2.56%. Given MidSouth Bancorp’s higher probable upside, analysts plainly believe MidSouth Bancorp is more favorable than Shinhan Financial Group.

Institutional and Insider Ownership

60.7% of MidSouth Bancorp shares are held by institutional investors. Comparatively, 2.5% of Shinhan Financial Group shares are held by institutional investors. 12.8% of MidSouth Bancorp shares are held by insiders. Comparatively, 1.0% of Shinhan Financial Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

MidSouth Bancorp has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, Shinhan Financial Group has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Profitability

This table compares MidSouth Bancorp and Shinhan Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MidSouth Bancorp -13.67% 0.40% 0.05%
Shinhan Financial Group 17.23% 8.32% 0.65%

Summary

Shinhan Financial Group beats MidSouth Bancorp on 8 of the 15 factors compared between the two stocks.

About MidSouth Bancorp

MidSouth Bancorp, Inc., a bank holding company, through its subsidiary MidSouth Bank, N.A., provides various community banking products and services to commercial and retail customers in the United States. The company offers various deposit products, including interest-bearing and noninterest-bearing checking accounts, money market, savings accounts, investment accounts, and NOW account deposits, as well as time deposits, such as certificates of deposits; and commercial and industrial, commercial real estate, and consumer loans, as well as other loans secured by real estate. It also provides cash management services; and electronic banking services comprising remote deposit capturing services, Internet banking, and debit and credit cards. As of February 27, 2018, the company had 48 offices located in Louisiana and Texas, as well as a network of approximately 55,000 surcharge-free ATMs. MidSouth Bancorp, Inc. was founded in 1984 and is headquartered in Lafayette, Louisiana.

About Shinhan Financial Group

Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through Banking, Credit Card, Securities, Life Insurance, and Others segments. Its retail banking services include mortgage and home equity, and retail lending products; demand, savings, and fixed deposit-taking; checking accounts, and electronic banking and automatic teller machine (ATM) services; and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting, and securitization; derivative services, including securities and derivative products, and foreign exchange trading; working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets comprising foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company provides trust account management, credit card, securities brokerage, life insurance, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. As of December 31, 2016, it operated a network of 871 service centers; 6,727 ATMs; 7 cash dispensers; and 24 digital kiosks. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.

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