Critical Comparison: MidWestOne Financial Group (NASDAQ:MOFG) versus First Interstate BancSystem (NASDAQ:FIBK)

MidWestOne Financial Group (NASDAQ:MOFG) and First Interstate BancSystem (NASDAQ:FIBK) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Insider & Institutional Ownership

65.4% of MidWestOne Financial Group shares are owned by institutional investors. Comparatively, 88.7% of First Interstate BancSystem shares are owned by institutional investors. 2.5% of MidWestOne Financial Group shares are owned by insiders. Comparatively, 8.2% of First Interstate BancSystem shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility and Risk

MidWestOne Financial Group has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, First Interstate BancSystem has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Earnings and Valuation

This table compares MidWestOne Financial Group and First Interstate BancSystem”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MidWestOne Financial Group	$206.03 million	3.97	-$60.29 million	($4.06)	-9.74
First Interstate BancSystem	$1.48 billion	2.24	$226.00 million	$2.22	14.25

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

Analyst Ratings

This is a summary of current ratings and recommmendations for MidWestOne Financial Group and First Interstate BancSystem, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MidWestOne Financial Group	1	3	1	0	2.00
First Interstate BancSystem	1	3	3	0	2.29

MidWestOne Financial Group currently has a consensus target price of $34.17, suggesting a potential downside of 13.59%. First Interstate BancSystem has a consensus target price of $35.43, suggesting a potential upside of 12.01%. Given First Interstate BancSystem’s stronger consensus rating and higher probable upside, analysts plainly believe First Interstate BancSystem is more favorable than MidWestOne Financial Group.

Dividends

MidWestOne Financial Group pays an annual dividend of $0.97 per share and has a dividend yield of 2.5%. First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 5.9%. MidWestOne Financial Group pays out -23.9% of its earnings in the form of a dividend. First Interstate BancSystem pays out 84.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares MidWestOne Financial Group and First Interstate BancSystem’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MidWestOne Financial Group	16.66%	10.35%	0.96%
First Interstate BancSystem	16.04%	6.82%	0.80%

Summary

First Interstate BancSystem beats MidWestOne Financial Group on 10 of the 16 factors compared between the two stocks.

About MidWestOne Financial Group

MidWestOne Financial Group, Inc. operates as the bank holding company for MidWestOne Bank that provides commercial and retail banking products and services to individuals, businesses, governmental units, and institutional customers. It offers range of deposit products, including noninterest bearing and interest bearing demand deposits, savings, money market, and time deposits accounts. The company also provides commercial, real estate, agricultural, credit card, and consumer loans; and financing arrangements, such as brokered deposits, term debt, subordinated debt, and equity. In addition, it offers trust and investment services comprising administering estates, trusts, and conservatorships; property and farm management, investment advisory, retail securities brokerage, financial planning, and custodial services; and licensed brokers services. Further, the company provides online and mobile banking, debit cards, automated teller machines, and safe deposit boxes. MidWestOne Financial Group, Inc. was founded in 1934 and is headquartered in Iowa City, Iowa.

About First Interstate BancSystem

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides range of banking products and services in the United States. It offers various traditional depository products, including checking, savings, and time deposits; and repurchase agreements primarily for commercial and municipal depositors. The company also offers real estate loans comprising commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans comprising direct personal loans, credit card loans and lines of credit, and indirect loans; variable and fixed rate commercial loans for small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions; and agricultural loans. In addition, it provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. Further, the company offers marketing, credit review, loan servicing, credit cards issuance and servicing, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, other operational, and specialized staff support services, as well as online and mobile banking services. The company serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, governmental services, healthcare, hospitality, housing, professional services, real estate development, retail, technology, tourism, and wholesale trade. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.