Critical Review: Midland States Bancorp (MSBI) & Trustmark (NASDAQ:TRMK)

Trustmark (NASDAQ: TRMK) and Midland States Bancorp (NASDAQ:MSBI) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

Dividends

Trustmark pays an annual dividend of $0.92 per share and has a dividend yield of 3.0%. Midland States Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.6%. Trustmark pays out 59.4% of its earnings in the form of a dividend. Midland States Bancorp pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Trustmark is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings for Trustmark and Midland States Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trustmark 0 5 0 0 2.00
Midland States Bancorp 0 0 1 0 3.00

Trustmark presently has a consensus target price of $33.80, indicating a potential upside of 9.07%. Midland States Bancorp has a consensus target price of $42.00, indicating a potential upside of 37.70%. Given Midland States Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Midland States Bancorp is more favorable than Trustmark.

Risk and Volatility

Trustmark has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Midland States Bancorp has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Trustmark 16.15% 8.35% 0.95%
Midland States Bancorp 7.56% 8.90% 0.90%

Earnings & Valuation

This table compares Trustmark and Midland States Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Trustmark $654.24 million 3.21 $105.63 million $1.55 19.99
Midland States Bancorp $193.31 million 3.02 $31.54 million $0.92 33.15

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

Insider & Institutional Ownership

62.6% of Trustmark shares are owned by institutional investors. Comparatively, 47.2% of Midland States Bancorp shares are owned by institutional investors. 1.4% of Trustmark shares are owned by company insiders. Comparatively, 14.9% of Midland States Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Trustmark beats Midland States Bancorp on 9 of the 16 factors compared between the two stocks.

About Trustmark

Trustmark Corporation is a bank holding company. The Company’s principal subsidiary is Trustmark National Bank (TNB). Through TNB and its subsidiaries, the Company operates as a financial services company providing banking and other financial solutions. It operates through three segments: General Banking, Wealth Management and Insurance. The General Banking Division is responsible for all traditional banking products and services, including loans and deposits. The Wealth Management Division provides customized solutions for customers by integrating financial services with traditional banking products and services, such as money management, full-service brokerage, financial planning, personal and institutional trust and retirement services. Through Fisher Brown Bottrell Insurance, Inc. (FBBI), a subsidiary of TNB, the Insurance Division provides a range of retail insurance products, including commercial risk management products, bonding, group benefits and personal lines coverage.

About Midland States Bancorp

Midland States Bancorp, Inc. is a diversified financial holding company. The Company’s banking subsidiary is Midland States Bank (the Bank). The Company’s principal business activity has been lending to and accepting deposits from individuals, businesses, municipalities and other entities. The Company’s segments include Banking, which provides a range of financial products and services to consumers and businesses, including loan products; commercial equipment leasing; mortgage loan sales and servicing; letters of credit; various types of deposit products, including checking, savings and time deposit accounts; merchant services, and corporate treasury management services; Commercial Federal Housing Administration (FHA) Origination and Servicing, which provides for the origination and servicing of government sponsored mortgages for multifamily and healthcare facilities, and Other, which includes the operating results of the Company and its wealth management business unit.

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