Reviewing National Bankshares (NASDAQ:NKSH) and Madison County Financial (OTCMKTS:MCBK)

Madison County Financial (OTCMKTS:MCBK) and National Bankshares (NASDAQ:NKSH) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Valuation & Earnings

This table compares Madison County Financial and National Bankshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Madison County Financial	$29.54 million	2.53	$3.82 million	N/A	N/A
National Bankshares	$79.08 million	2.91	$7.62 million	$2.04	17.70

National Bankshares has higher revenue and earnings than Madison County Financial.

Dividends

Madison County Financial pays an annual dividend of $0.36 per share and has a dividend yield of 1.3%. National Bankshares pays an annual dividend of $1.56 per share and has a dividend yield of 4.3%. National Bankshares pays out 76.5% 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 Madison County Financial and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Madison County Financial	N/A	N/A	N/A
National Bankshares	15.56%	8.62%	0.80%

Insider & Institutional Ownership

29.7% of National Bankshares shares are held by institutional investors. 16.9% of Madison County Financial shares are held by insiders. Comparatively, 3.2% of National Bankshares shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Madison County Financial and National Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Madison County Financial	0	0	0	0	0.00
National Bankshares	0	1	0	0	2.00

Risk and Volatility

Madison County Financial has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Summary

National Bankshares beats Madison County Financial on 10 of the 12 factors compared between the two stocks.

About Madison County Financial

Madison County Financial, Inc. operates as the holding company for Madison County Bank that provides banking and financial services to individual and corporate customers in Nebraska, the United States. It offers checking, money market savings, savings, and individual retirement accounts; certificates of deposit; credit and debit cards; home loans; and consumer loans, including home equity lines of credit, second mortgage, home improvement, recreational vehicle, personal, and overdraft protection loans, as well as loans for automobiles, trucks, and vans. The company also provides agricultural real estate, machinery and equipment, livestock and crop, and operating loans; and commercial real estate, construction, investment property, and working capital loans, as well as equipment financing services. In addition, it offers online and mobile banking, and merchant services. The company was formerly known as Madison County Holding Company and changed its name to Madison County Financial, Inc. in October 2012. Madison County Financial, Inc. was founded in 1888 and is headquartered in Madison, Nebraska.

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.