Contrasting MetroCity Bankshares (NASDAQ:MCBS) & Veritex (NASDAQ:VBTX)

Veritex (NASDAQ:VBTXGet Free Report) and MetroCity Bankshares (NASDAQ:MCBSGet Free Report) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.

Insider & Institutional Ownership

88.3% of Veritex shares are held by institutional investors. Comparatively, 25.3% of MetroCity Bankshares shares are held by institutional investors. 4.6% of Veritex shares are held by company insiders. Comparatively, 27.5% of MetroCity Bankshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Veritex has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, MetroCity Bankshares has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Veritex and MetroCity Bankshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Veritex 0 2 2 0 2.50
MetroCity Bankshares 0 1 0 0 2.00

Veritex presently has a consensus target price of $24.38, suggesting a potential upside of 22.43%. MetroCity Bankshares has a consensus target price of $28.00, suggesting a potential upside of 12.59%. Given Veritex’s stronger consensus rating and higher probable upside, equities analysts clearly believe Veritex is more favorable than MetroCity Bankshares.

Profitability

This table compares Veritex and MetroCity Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Veritex 12.47% 8.46% 1.03%
MetroCity Bankshares 23.26% 13.15% 1.43%

Dividends

Veritex pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. MetroCity Bankshares pays an annual dividend of $0.80 per share and has a dividend yield of 3.2%. Veritex pays out 46.5% of its earnings in the form of a dividend. MetroCity Bankshares pays out 40.6% 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 Veritex and MetroCity Bankshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Veritex $745.98 million 1.46 $108.26 million $1.72 11.58
MetroCity Bankshares $118.31 million 5.30 $51.61 million $1.97 12.62

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

About Veritex

(Get Free Report)

Veritex Holdings, Inc. operates as the bank holding company for Veritex Community Bank that provides various commercial banking products and services to small and medium-sized businesses, and professionals. The company accepts deposit products include demand, savings, money market, and time accounts. Its loan products include commercial real estate and general commercial, mortgage warehouse loans, residential real estate, construction and land, farmland, paycheck protection program, 1-4 family residential, agricultural, multi-family residential, and consumer loans, as well as purchased receivables financing. The company also provides interest rate swap services; and a range of online banking solutions, such as access to account balances, online transfers, online bill payment and electronic delivery of customer statements, and ATMs, as well as mobile banking, mail, and personal appointment. In addition, it offers debit cards, night depository services, direct deposits, cashier's checks, and letters of credit; treasury management services, including balance reporting, transfers between accounts, wire transfer initiation, automated clearinghouse origination, and stop payments; and cash management deposit products and services consisting of lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts. The company operates full-service branches located in the Dallas-Fort Worth metroplex, and the Houston metropolitan area. Veritex Holdings, Inc. was incorporated in 2009 and is headquartered in Dallas, Texas.

About MetroCity Bankshares

(Get Free Report)

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.

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