HopFed Bancorp (NASDAQ: HFBC) and Middleburg Financial Corp. (NASDAQ:MBRG) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current ratings for HopFed Bancorp and Middleburg Financial Corp., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HopFed Bancorp 0 0 0 0 N/A
Middleburg Financial Corp. 0 0 0 0 N/A

Valuation & Earnings

This table compares HopFed Bancorp and Middleburg Financial Corp.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
HopFed Bancorp $34.14 million 2.64 $4.17 million $0.67 21.60
Middleburg Financial Corp. N/A N/A N/A $1.13 34.26

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

Institutional & Insider Ownership

46.9% of HopFed Bancorp shares are held by institutional investors. Comparatively, 29.1% of Middleburg Financial Corp. shares are held by institutional investors. 4.3% of HopFed Bancorp shares are held by insiders. Comparatively, 5.1% of Middleburg Financial Corp. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

HopFed Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.4%. Middleburg Financial Corp. pays an annual dividend of $0.52 per share and has a dividend yield of 1.3%. HopFed Bancorp pays out 29.9% of its earnings in the form of a dividend. Middleburg Financial Corp. pays out 46.0% 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. HopFed Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares HopFed Bancorp and Middleburg Financial Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HopFed Bancorp 10.26% 4.74% 0.46%
Middleburg Financial Corp. 8.07% 3.43% 0.34%

Risk & Volatility

HopFed Bancorp has a beta of 0.12, indicating that its share price is 88% less volatile than the S&P 500. Comparatively, Middleburg Financial Corp. has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500.

Summary

HopFed Bancorp beats Middleburg Financial Corp. on 7 of the 10 factors compared between the two stocks.

HopFed Bancorp Company Profile

HopFed Bancorp, Inc. is a savings and loan holding company that operates through its subsidiary, Heritage Bank USA, Inc. (the Bank). The Bank is a Kentucky state chartered commercial bank based in Hopkinsville, Kentucky, with branch offices in Kentucky and Tennessee. The business of the Bank primarily consists of attracting deposits from the general public and investing such deposits in loans secured by single family residential real estate and investment securities, including United States Government and agency securities, municipal and corporate bonds, collateralized mortgages obligations (CMOs), and mortgage-backed securities. The Bank also originates single-family residential/construction loans, and multi-family and commercial real estate loans, as well as loans secured by deposits, other consumer loans and commercial loans.

Middleburg Financial Corp. Company Profile

Middleburg Financial Corporation is a bank holding company. The Company conducts its primary operations through two subsidiaries, Middleburg Bank and Middleburg Investment Group, Inc. The Company has another subsidiary, MFC Capital Trust II. The Company’s segments are Commercial & Retail Banking, which includes loans, investment securities and deposit accounts; Wealth Management, including wealth management activities, and Mortgage Banking, which includes mortgage banking activities. The Company, through its subsidiaries, offers a range of banking, fiduciary and investment management services to both individuals and small businesses. The Company’s business activities include commercial and retail banking services through Middleburg Bank, wealth management services through Middleburg Investment Group, Inc., and mortgage banking services. Other banking services available to its clients include Internet banking, travelers’ checks, safe deposit rentals, notary public and wire services.

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