Midland States Bancorp (NASDAQ:MSBI) vs. Bridgewater Bancshares (NASDAQ:BWB) Critical Analysis

Bridgewater Bancshares (NASDAQ:BWB) and Midland States Bancorp (NASDAQ:MSBI) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Bridgewater Bancshares and Midland States Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bridgewater Bancshares	0	2	2	0	2.50
Midland States Bancorp	2	4	0	0	1.67

Bridgewater Bancshares currently has a consensus price target of $20.50, suggesting a potential upside of 14.91%. Midland States Bancorp has a consensus price target of $19.50, suggesting a potential downside of 0.91%. Given Bridgewater Bancshares’ stronger consensus rating and higher probable upside, equities analysts plainly believe Bridgewater Bancshares is more favorable than Midland States Bancorp.

Volatility & Risk

Bridgewater Bancshares has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, Midland States Bancorp has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Insider and Institutional Ownership

65.8% of Bridgewater Bancshares shares are owned by institutional investors. Comparatively, 60.9% of Midland States Bancorp shares are owned by institutional investors. 23.3% of Bridgewater Bancshares shares are owned by company insiders. Comparatively, 5.3% of Midland States Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Bridgewater Bancshares and Midland States Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bridgewater Bancshares	14.52%	10.27%	0.80%
Midland States Bancorp	-3.80%	-3.63%	-0.25%

Earnings and Valuation

This table compares Bridgewater Bancshares and Midland States Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bridgewater Bancshares	$253.27 million	1.94	$32.83 million	$1.33	13.41
Midland States Bancorp	$489.48 million	0.87	$38.04 million	($1.27)	-15.50

Midland States Bancorp has higher revenue and earnings than Bridgewater Bancshares. Midland States Bancorp is trading at a lower price-to-earnings ratio than Bridgewater Bancshares, indicating that it is currently the more affordable of the two stocks.

Summary

Bridgewater Bancshares beats Midland States Bancorp on 11 of the 14 factors compared between the two stocks.

About Bridgewater Bancshares

Bridgewater Bancshares, Inc. operates as the bank holding company for Bridgewater Bank that provides banking products and services to commercial real estate investors, entrepreneurs, business clients, and individuals in the United States. The company provides savings and money market accounts, demand deposits, time and brokered deposits, and interest and noninterest bearing transaction, as well as certificates of deposit. It offers commercial loans to sole proprietorships, partnerships, corporations, and other business enterprises to finance working capital, capital investment, or for other business related purposes; paycheck protection program loans; construction and land development loans; 1-4 family mortgage loans; multifamily lending products; owner and non-owner occupied commercial real estate loans; and consumer and other loans. In addition, the company online, mobile, and direct banking services. Bridgewater Bancshares, Inc. was incorporated in 2005 and is headquartered in Saint Louis Park, Minnesota.

About Midland States Bancorp

Midland States Bancorp, Inc. operates as a financial holding company for Midland States Bank that provides various banking products and services to individuals, businesses, municipalities, and other entities. It operates through Banking, Wealth Management, and Other segments. The company provides a range of financial products and services to consumers and businesses, including commercial loans to finance agricultural equipment and production; and commercial real estate loans for owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties, and assisted living facilities. In addition, it offers construction and land development loans, such as real estate investment properties and residential developments, and lesser extent loans; and residential real estate loans, which includes first and second mortgage loans, and home equity lines of credit consisting of loans secured by first or second mortgages on primarily owner occupied primary residences. The company also provides consumer installment loans for the purchase of cars, boats and other recreational vehicles, as well as for the purchase of major appliances and other home improvement projects; and commercial equipment leasing programs for manufacturing, construction, transportation, and healthcare industries. Further, it offers merchant services; deposit products, including checking, time, savings, money market, and certificates of deposit, as well as sweep accounts; letters of credit; and trust and wealth management services, such as financial and estate planning, trustee and custodial, investment management, tax, insurance, and business planning, corporate retirement plan consulting and administration, and retail brokerage services. The company was founded in 1881 and is headquartered in Effingham, Illinois.