America First Multifamily Investors, L.P. (NASDAQ: ATAX) and Porter Bancorp (NASDAQ:PBIB) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitabiliy, risk and analyst recommendations.

Insider and Institutional Ownership

7.4% of America First Multifamily Investors, L.P. shares are owned by institutional investors. Comparatively, 18.4% of Porter Bancorp shares are owned by institutional investors. 1.3% of America First Multifamily Investors, L.P. shares are owned by company insiders. Comparatively, 28.7% of Porter Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares America First Multifamily Investors, L.P. and Porter Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
America First Multifamily Investors, L.P. $41.89 million 8.70 $24.70 million $0.41 14.76
Porter Bancorp $36.05 million 1.74 -$2.74 million ($0.45) -22.91

America First Multifamily Investors, L.P. has higher revenue and earnings than Porter Bancorp. Porter Bancorp is trading at a lower price-to-earnings ratio than America First Multifamily Investors, L.P., indicating that it is currently the more affordable of the two stocks.

Dividends

America First Multifamily Investors, L.P. pays an annual dividend of $0.50 per share and has a dividend yield of 8.3%. Porter Bancorp does not pay a dividend. America First Multifamily Investors, L.P. pays out 122.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent recommendations and price targets for America First Multifamily Investors, L.P. and Porter Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
America First Multifamily Investors, L.P. 0 0 1 0 3.00
Porter Bancorp 0 0 0 0 N/A

America First Multifamily Investors, L.P. presently has a consensus target price of $6.00, suggesting a potential downside of 0.83%. Given America First Multifamily Investors, L.P.’s higher probable upside, research analysts plainly believe America First Multifamily Investors, L.P. is more favorable than Porter Bancorp.

Profitability

This table compares America First Multifamily Investors, L.P. and Porter Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
America First Multifamily Investors, L.P. 47.50% 8.61% 2.98%
Porter Bancorp -6.37% -7.18% -0.27%

Volatility and Risk

America First Multifamily Investors, L.P. has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, Porter Bancorp has a beta of 1.72, meaning that its stock price is 72% more volatile than the S&P 500.

Summary

America First Multifamily Investors, L.P. beats Porter Bancorp on 10 of the 14 factors compared between the two stocks.

About America First Multifamily Investors, L.P.

America First Multifamily Investors, L.P. is engaged in acquiring, holding, selling and dealing with a portfolio of mortgage revenue bonds, which have been issued to provide construction and/or permanent financing for multifamily and student housing (collectively Residential Properties) and commercial properties. Its segments are Mortgage Revenue Bond Investments, MF Properties, Public Housing Capital Fund Trusts and mortgage-backed securities (MBS) Investments. Its Mortgage Revenue Bond Investments segment consists of its portfolio of mortgage revenue bonds, which have been issued to provide construction and/or permanent financing for the residential properties and a commercial property. The MF Properties segment consists of indirect equity interests in multifamily, student housing, and senior citizen residential properties, which are not financed by mortgage revenue bonds held by the Company, but which it intends to finance by such bonds through a restructuring.

About Porter Bancorp

Porter Bancorp, Inc. is a bank holding company. The Company operates through its subsidiary, PBI Bank (the Bank). The Bank is a community bank with a range of commercial and personal banking products. It offers retail and commercial deposit products. It offers drive-in banking facilities, automatic teller machines, night depository, personalized checks, credit cards, debit cards, Internet banking, mobile banking, treasury management services, remote deposit services, electronic funds transfers through automated clearing house services, domestic and foreign wire transfers, cash management, vault services, and loan and deposit sweep accounts. It operates banking offices in approximately 12 counties in Kentucky. Its markets include metropolitan Louisville in Jefferson County and the surrounding counties of Henry and Bullitt. It serves south central Kentucky and southern Kentucky from banking offices in Butler, Green, Hart, Edmonson, Barren, Warren, Ohio and Daviess Counties.

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