Marlin Business Services (NASDAQ:MRLN) and 1st Source (NASDAQ:SRCE) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, valuation, institutional ownership, analyst recommendations, earnings and risk.

Dividends

Marlin Business Services pays an annual dividend of $0.56 per share and has a dividend yield of 7.9%. 1st Source pays an annual dividend of $1.12 per share and has a dividend yield of 3.9%. 1st Source pays out 31.4% of its earnings in the form of a dividend. 1st Source has raised its dividend for 34 consecutive years.

Volatility & Risk

Marlin Business Services has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500. Comparatively, 1st Source has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500.

Profitability

This table compares Marlin Business Services and 1st Source’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marlin Business Services 6.43% 5.99% 0.98%
1st Source 22.49% 10.25% 1.29%

Valuation & Earnings

This table compares Marlin Business Services and 1st Source’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marlin Business Services $166.66 million 0.50 $27.12 million N/A N/A
1st Source $384.01 million 1.91 $91.96 million $3.57 8.06

1st Source has higher revenue and earnings than Marlin Business Services.

Analyst Ratings

This is a summary of recent ratings for Marlin Business Services and 1st Source, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marlin Business Services 0 0 0 0 N/A
1st Source 0 1 0 0 2.00

Marlin Business Services currently has a consensus price target of $16.00, indicating a potential upside of 126.95%. Given Marlin Business Services’ higher possible upside, equities analysts clearly believe Marlin Business Services is more favorable than 1st Source.

Insider & Institutional Ownership

87.8% of Marlin Business Services shares are owned by institutional investors. Comparatively, 70.1% of 1st Source shares are owned by institutional investors. 6.3% of Marlin Business Services shares are owned by insiders. Comparatively, 20.2% of 1st Source shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

1st Source beats Marlin Business Services on 9 of the 14 factors compared between the two stocks.

About Marlin Business Services

Marlin Business Services Corp. provides credit products and services to small and mid-sized businesses in the United States. The company's products and services include loans and leases for the acquisition of commercial equipment and working capital loans. It offers lease finance to approximately 100 categories of equipment. As of December 31, 2018, the company had a portfolio of approximately 94,000 equipment finance leases and loans. It also offers property reinsurance coverage for its financed equipment; and operates a commercial bank that issues certificates of deposit and money market demand accounts, as well as provides small business loans. The company provides its solutions through a network of independent commercial equipment dealers and national account programs, as well as through direct solicitation and relationships with select lease and loan brokers. Marlin Business Services Corp. was founded in 1997 and is based in Mount Laurel, New Jersey.

About 1st Source

1st Source Corporation operates as the holding company for 1st Source Bank that provides commercial and consumer banking services, trust and investment management services, and insurance to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate loans, and lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides a range of trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for new and used aircraft, automobiles and light trucks, construction equipment, and medium and heavy duty trucks; and leases construction equipment, various types of trucks, vans, automobiles, motor coaches, shuttle buses, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services; and investment advisory services to trust and investment clients. As of December 31, 2018, the company operated through 80 banking centers in 17 counties in Indiana and Michigan, and Sarasota County in Florida. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.

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