Ames National (NASDAQ:ATLO) & National Bankshares (NASDAQ:NKSH) Head-To-Head Analysis

Ames National (NASDAQ:ATLO) and National Bankshares (NASDAQ:NKSH) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, earnings, risk, valuation, institutional ownership, dividends and analyst recommendations.

Earnings and Valuation

This table compares Ames National and National Bankshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ames National	$52.87 million	3.00	$10.82 million	$1.11	15.90
National Bankshares	$42.88 million	3.97	$15.69 million	$2.26	12.79

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

Profitability

This table compares Ames National and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ames National	10.77%	5.92%	0.44%
National Bankshares	12.65%	6.70%	0.54%

Dividends

Ames National pays an annual dividend of $0.80 per share and has a dividend yield of 4.5%. National Bankshares pays an annual dividend of $1.46 per share and has a dividend yield of 5.1%. Ames National pays out 72.1% of its earnings in the form of a dividend. National Bankshares pays out 64.6% 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. National Bankshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

26.5% of Ames National shares are owned by institutional investors. Comparatively, 29.7% of National Bankshares shares are owned by institutional investors. 3.2% of Ames National shares are owned by insiders. Comparatively, 2.8% of National Bankshares shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Ames National and National Bankshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ames National	0	0	0	0	N/A
National Bankshares	0	0	0	0	N/A

Volatility and Risk

Ames National has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Summary

National Bankshares beats Ames National on 9 of the 12 factors compared between the two stocks.

About Ames National

Ames National Corporation operates as a multi-bank holding company that provides banking products and services primarily in Boone, Clarke, Hancock, Marshall, Polk, Story, and Union counties in central, north central, and south-central Iowa. The company accepts various deposit products, including checking and savings accounts; and time deposits, such as money market accounts and certificates of deposit. It also provides loans, such as short-term and medium-term commercial and agricultural real estate, residential real estate loans, equipment, vehicle, and home improvement loans; consumer loans to finance consumer purchases, such as automobiles, trucks, recreational vehicles, household furnishings, boats, personal loans, and lines of credit; agricultural and business operating loans and lines of credit; and originates mortgage loans for sale into the secondary market. In addition, the company offers cash management, merchant credit card processing, safe deposit box, wire transfer, direct deposit, and automated/video teller machine access services; and automatic drafts for various accounts, as well as wealth management services. Further, it provides farm management, investment, and custodial services for individuals, businesses, and non-profit organizations; and online, mobile, and private banking services. Ames National Corporation was incorporated in 1903 and is headquartered in Ames, Iowa.

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.