Critical Review: Intesa Sanpaolo (OTCMKTS:ISNPY) versus MainStreet Bank (NASDAQ:MNSB)

MainStreet Bank (NASDAQ:MNSB) and Intesa Sanpaolo (OTCMKTS:ISNPY) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Institutional & Insider Ownership

52.3% of MainStreet Bank shares are held by institutional investors. Comparatively, 1.2% of Intesa Sanpaolo shares are held by institutional investors. 10.2% of MainStreet Bank shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

MainStreet Bank has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Intesa Sanpaolo has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Dividends

MainStreet Bank pays an annual dividend of $0.40 per share and has a dividend yield of 1.6%. Intesa Sanpaolo pays an annual dividend of $1.91 per share and has a dividend yield of 4.1%. MainStreet Bank pays out 19.6% of its earnings in the form of a dividend. Intesa Sanpaolo pays out 51.3% 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.

Profitability

This table compares MainStreet Bank and Intesa Sanpaolo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MainStreet Bank	13.24%	9.16%	0.79%
Intesa Sanpaolo	25.19%	14.10%	1.02%

Analyst Recommendations

This is a summary of current recommendations and price targets for MainStreet Bank and Intesa Sanpaolo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MainStreet Bank	0	1	1	0	2.50
Intesa Sanpaolo	0	3	4	1	2.75

Valuation and Earnings

This table compares MainStreet Bank and Intesa Sanpaolo”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MainStreet Bank	$135.62 million	1.34	$15.61 million	$2.04	12.47
Intesa Sanpaolo	$43.96 billion	3.16	$10.54 billion	$3.72	12.66

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

Summary

Intesa Sanpaolo beats MainStreet Bank on 13 of the 16 factors compared between the two stocks.

About MainStreet Bank

MainStreet Bancshares, Inc. operates as the bank holding company for MainStreet Bank that provides various banking products and services for individuals, small to medium-sized businesses, and professional service organizations. The company offers demand, NOW, money market, savings, and sweep accounts, as well as certificates of deposit; business and consumer checking, interest-bearing checking, business account analysis, and other depository services; and cash management, wire transfer, check imaging, bill pay, remote deposit capture, and courier services. It also provides commercial loans, include government contract receivables, plant and equipment, general working capital, contract administration, and acquisition loans; commercial real estate, real estate construction, and residential real estate loans; and consumer loans comprising term loans and overdraft protection, as well as debit and credit cards. In addition, the company offers deposit insurance solutions; remote deposit of checks; and internet bill payment, online cash management, and online and mobile banking services. It operates in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington D.C., as well as automated teller machines. The company was incorporated in 2003 and is headquartered in Fairfax, Virginia.

About Intesa Sanpaolo

Intesa Sanpaolo S.p.A. provides various financial products and services primarily in Italy. It operates through six segments: Banca dei Territori, IMI Corporate & Investment Banking, International Subsidiary Banks, Asset Management, Private Banking, and Insurance. The company offers lending and deposit products; private and commercial banking, corporate and transaction banking, structured finance, investment banking, public finance, and capital markets; industrial credit, leasing, and factoring; asset management; life and non-life insurance and pension products; asset and wealth management; private investments; and bancassurance products. The company serves individuals, small and medium-sized businesses, non-profit customers, corporates and financial institutions, public administration, private clients and high net worth individuals, institutional clientele, and other customers. Intesa Sanpaolo S.p.A. was founded in 1998 and is headquartered in Turin, Italy.