QCR (NASDAQ:QCRH) versus Ames National (NASDAQ:ATLO) Critical Analysis

QCR (NASDAQ:QCRH) and Ames National (NASDAQ:ATLO) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.

Earnings & Valuation

This table compares QCR and Ames National”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
QCR	$329.61 million	3.87	$113.85 million	$6.64	11.33
Ames National	$92.44 million	1.93	$10.22 million	$1.54	13.01

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

Dividends

QCR pays an annual dividend of $0.24 per share and has a dividend yield of 0.3%. Ames National pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. QCR pays out 3.6% of its earnings in the form of a dividend. Ames National pays out 51.9% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
QCR	19.43%	11.71%	1.30%
Ames National	14.44%	7.46%	0.64%

Insider & Institutional Ownership

70.0% of QCR shares are owned by institutional investors. Comparatively, 26.5% of Ames National shares are owned by institutional investors. 3.7% of QCR shares are owned by company insiders. Comparatively, 2.1% 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 will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for QCR and Ames National, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
QCR	0	0	5	0	3.00
Ames National	0	1	0	0	2.00

QCR currently has a consensus price target of $87.38, indicating a potential upside of 16.11%. Given QCR’s stronger consensus rating and higher possible upside, equities research analysts clearly believe QCR is more favorable than Ames National.

Volatility and Risk

QCR has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500. Comparatively, Ames National has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500.

Summary

QCR beats Ames National on 14 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 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.