Head to Head Analysis: Preferred Bank (PFBC) vs. MutualFirst Financial (MFSF)

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


This table compares Preferred Bank and MutualFirst Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Preferred Bank 30.57% 17.86% 1.66%
MutualFirst Financial 15.56% 9.92% 0.95%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Preferred Bank and MutualFirst Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Preferred Bank 0 1 4 1 3.00
MutualFirst Financial 0 2 0 0 2.00

Preferred Bank currently has a consensus target price of $73.50, suggesting a potential upside of 18.97%. MutualFirst Financial has a consensus target price of $39.00, suggesting a potential upside of 1.83%. Given Preferred Bank’s stronger consensus rating and higher possible upside, equities analysts clearly believe Preferred Bank is more favorable than MutualFirst Financial.


Preferred Bank pays an annual dividend of $1.00 per share and has a dividend yield of 1.6%. MutualFirst Financial pays an annual dividend of $0.72 per share and has a dividend yield of 1.9%. Preferred Bank pays out 29.2% of its earnings in the form of a dividend. MutualFirst Financial pays out 37.7% 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. Preferred Bank has increased its dividend for 3 consecutive years and MutualFirst Financial has increased its dividend for 4 consecutive years. MutualFirst Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

91.0% of Preferred Bank shares are owned by institutional investors. Comparatively, 45.6% of MutualFirst Financial shares are owned by institutional investors. 28.0% of MutualFirst Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Preferred Bank has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, MutualFirst Financial has a beta of 0.14, indicating that its share price is 86% less volatile than the S&P 500.

Valuation and Earnings

This table compares Preferred Bank and MutualFirst Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Preferred Bank $163.42 million 4.99 $43.39 million $3.42 18.06
MutualFirst Financial $76.94 million 4.28 $12.31 million $1.91 20.05

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


Preferred Bank beats MutualFirst Financial on 14 of the 18 factors compared between the two stocks.

Preferred Bank Company Profile

Preferred Bank provides various commercial banking products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals in the United States. The company's deposit products include checking, savings, negotiable order of withdrawal, and money market deposit accounts; fixed-rate and fixed maturity retail, and non-retail certificates of deposit; and individual retirement accounts. It also provides real estate mortgage loans that are secured by retail, industrial, office, special purpose, and residential single and multi-family properties; real estate construction loans; commercial loans comprising lines of credit for working capital and term loans for capital expenditures; and commercial and export letters of credit, import lines of credit, documentary collections, international wire transfers, export financing products, bills purchase programs, and acceptances/trust receipt financing products, as well as standby letters of credit and foreign exchange services for importers and exporters. In addition, it offers various high-wealth banking services to wealthy individuals residing in the Pacific Rim area with residences, real estate investments, or businesses in Southern California. Further, it provides various banking services to physicians, accountants, attorneys, business managers, and other professionals; and safe deposit boxes, account reconciliation, courier service, and cash management services to the manufacturing, service, and distribution companies. Additionally, it offers remote deposit capture, and Internet and mobile banking services. As of December 31, 2017, it had 13 full-service branch offices in Alhambra, Arcadia, Century City, City of Industry, Diamond Bar, Los Angeles, Pico Rivera, San Francisco, Tarzana, Torrance, Anaheim, and Irvine, California; and Flushing, New York. The company was founded in 1991 and is headquartered in Los Angeles, California.

MutualFirst Financial Company Profile

MutualFirst Financial, Inc. operates as the bank holding company for MutualBank that provides various financial services in the United States. It accepts savings deposit, NOW, and demand accounts, as well as certificates of deposit. The company offers one-to four-family residential property, commercial real estate, construction and development, and commercial business loans; consumer loans, such as auto loans, boat and recreational vehicle loans, loans secured by savings deposits, and credit card and unsecured consumer loans; and adjustable rate loans. In addition, it operates as an insurance agent; and sells life and other insurance products. Further, the company provides trust, investment, broker advisory, retirement plan, and private banking products and services. It has 27 full service retail financial centers in Allen, Delaware, Elkhart, Grant, Kosciusko, Randolph, St. Joseph, and Wabash counties in Indiana; and wealth management offices in Fishers and Crawfordsville, Indiana; and 1 loan origination office in New Buffalo, Michigan. MutualFirst Financial, Inc. was founded in 1889 and is headquartered in Muncie, Indiana.

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