Bank of the James Financial Group (NASDAQ:BOTJ) & MainStreet Bank (NASDAQ:MNSB) Head-To-Head Analysis

MainStreet Bank (NASDAQ:MNSB) and Bank of the James Financial Group (NASDAQ:BOTJ) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Dividends

MainStreet Bank pays an annual dividend of $0.40 per share and has a dividend yield of 1.9%. Bank of the James Financial Group pays an annual dividend of $0.60 per share and has a dividend yield of 2.4%. MainStreet Bank pays out 20.5% of its earnings in the form of a dividend. Bank of the James Financial Group pays out 22.6% 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. Bank of the James Financial Group has increased its dividend for 5 consecutive years. Bank of the James Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares MainStreet Bank and Bank of the James Financial Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MainStreet Bank	$74.52 million	2.06	$15.61 million	$1.95	11.06
Bank of the James Financial Group	$52.28 million	2.19	$9.02 million	$2.65	9.50

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

Profitability

This table compares MainStreet Bank and Bank of the James Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MainStreet Bank	12.51%	8.72%	0.74%
Bank of the James Financial Group	18.28%	14.80%	1.15%

Volatility & Risk

MainStreet Bank has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Bank of the James Financial Group has a beta of 0.19, suggesting that its share price is 81% less volatile than the S&P 500.

Insider and Institutional Ownership

52.3% of MainStreet Bank shares are held by institutional investors. Comparatively, 18.5% of Bank of the James Financial Group shares are held by institutional investors. 10.2% of MainStreet Bank shares are held by company insiders. Comparatively, 11.9% of Bank of the James Financial Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for MainStreet Bank and Bank of the James Financial Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MainStreet Bank	0	1	1	0	2.50
Bank of the James Financial Group	0	0	1	0	3.00

Summary

Bank of the James Financial Group beats MainStreet Bank on 9 of the 15 factors compared between the two stocks.

About MainStreet Bank

MainStreet Bank is a community bank headquartered in Fairfax, Virginia, and the banking subsidiary of MainStreet Bancshares, Inc., which trades on the Nasdaq under the symbol MNSB. The bank serves businesses, professionals and individuals in Northern Virginia and the broader Washington, D.C., metropolitan area. The bank provides commercial and consumer banking services, including business and personal checking and savings accounts, certificates of deposit, commercial real estate loans, business loans, residential lending and consumer credit.

About Bank of the James Financial Group

Bank of the James Financial Group, Inc. is a bank holding company headquartered in Lynchburg, Virginia. Through its principal subsidiary, Bank of the James, the company provides community banking services to individuals, businesses and organizations in Central Virginia and surrounding markets. Bank of the James offers deposit accounts, commercial and residential real estate lending, consumer loans, business loans, mortgage services and other traditional banking products. The bank also provides treasury management and cash-management services designed to support commercial customers, along with online and mobile banking capabilities for personal and business clients.