Head to Head Review: National Bankshares (NASDAQ:NKSH) versus John Marshall Bancorp (NASDAQ:JMSB)

National Bankshares (NASDAQ:NKSH) and John Marshall Bancorp (NASDAQ:JMSB) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Dividends

National Bankshares pays an annual dividend of $1.46 per share and has a dividend yield of 4.9%. John Marshall Bancorp pays an annual dividend of $0.30 per share and has a dividend yield of 1.5%. National Bankshares pays out 71.6% of its earnings in the form of a dividend. John Marshall Bancorp pays out 21.3% 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 National Bankshares and John Marshall Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bankshares	$52.54 million	3.63	$7.62 million	$2.04	14.69
John Marshall Bancorp	$112.40 million	2.52	$17.12 million	$1.41	14.10

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

Profitability

This table compares National Bankshares and John Marshall Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bankshares	15.56%	8.81%	0.80%
John Marshall Bancorp	17.62%	8.00%	0.89%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for National Bankshares and John Marshall Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bankshares	0	1	1	0	2.50
John Marshall Bancorp	0	1	1	0	2.50

National Bankshares presently has a consensus target price of $38.00, suggesting a potential upside of 26.79%. John Marshall Bancorp has a consensus target price of $22.00, suggesting a potential upside of 10.66%. Given National Bankshares’ higher probable upside, equities research analysts clearly believe National Bankshares is more favorable than John Marshall Bancorp.

Risk and Volatility

National Bankshares has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, John Marshall Bancorp has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Institutional and Insider Ownership

29.7% of National Bankshares shares are owned by institutional investors. Comparatively, 39.1% of John Marshall Bancorp shares are owned by institutional investors. 3.2% of National Bankshares shares are owned by insiders. Comparatively, 12.1% of John Marshall Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.

About John Marshall Bancorp

John Marshall Bancorp, Inc. operates as the bank holding company for John Marshall Bank that provides banking products and financial services. The company accepts checking, demand, NOW, savings, and money market accounts, as well as certificates of deposit. It offers residential and commercial construction and development loans, commercial term, mortgage, commercial real estate, industrial loans, and other commercial lines of credit; debit and credit cards; and treasury and cash management, investment, business and personal insurance, remote deposit capture, deposit sweep and online and mobile banking services. The company serves small to medium-sized businesses, their owners and employees, professional corporations, non-profits, and individuals. The company was founded in 2005 and is headquartered in Reston, Virginia.