MidWestOne Financial Group (NASDAQ: MOFG) and Macatawa Bank Corporation (NASDAQ:MCBC) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.
Earnings and Valuation
This table compares MidWestOne Financial Group and Macatawa Bank Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|MidWestOne Financial Group||$114.71 million||3.83||$25.05 million||$2.05||17.52|
|Macatawa Bank Corporation||$69.91 million||5.07||$17.99 million||$0.53||19.70|
MidWestOne Financial Group has higher revenue and earnings than Macatawa Bank Corporation. MidWestOne Financial Group is trading at a lower price-to-earnings ratio than Macatawa Bank Corporation, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
46.4% of MidWestOne Financial Group shares are owned by institutional investors. Comparatively, 27.2% of Macatawa Bank Corporation shares are owned by institutional investors. 25.3% of MidWestOne Financial Group shares are owned by insiders. Comparatively, 8.7% of Macatawa Bank Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This table compares MidWestOne Financial Group and Macatawa Bank Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MidWestOne Financial Group||17.60%||7.55%||0.79%|
|Macatawa Bank Corporation||24.52%||10.86%||1.04%|
This is a breakdown of current ratings and price targets for MidWestOne Financial Group and Macatawa Bank Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MidWestOne Financial Group||0||1||1||0||2.50|
|Macatawa Bank Corporation||0||1||0||0||2.00|
MidWestOne Financial Group currently has a consensus target price of $38.50, indicating a potential upside of 7.18%. Macatawa Bank Corporation has a consensus target price of $10.00, indicating a potential downside of 4.21%. Given MidWestOne Financial Group’s stronger consensus rating and higher possible upside, analysts clearly believe MidWestOne Financial Group is more favorable than Macatawa Bank Corporation.
MidWestOne Financial Group pays an annual dividend of $0.68 per share and has a dividend yield of 1.9%. Macatawa Bank Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 1.9%. MidWestOne Financial Group pays out 33.2% of its earnings in the form of a dividend. Macatawa Bank Corporation 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.
Risk and Volatility
MidWestOne Financial Group has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Macatawa Bank Corporation has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.
MidWestOne Financial Group beats Macatawa Bank Corporation on 10 of the 16 factors compared between the two stocks.
About MidWestOne Financial Group
MidWestOne Financial Group, Inc. is a bank holding and financial holding company. The Company operates through its bank subsidiaries, MidWestOne Bank, Central Bank and MidWestOne Insurance Services, Inc. that operates through three agencies located in central and east-central Iowa. As of December 31, 2016, the Bank operated a total of 43 banking offices in Iowa, Minnesota, Wisconsin, and Florida. It provides full service retail banking in the communities in which its branch offices are located and also offers trust and investment management services. The Bank offers deposit products, including checking and other demand deposit accounts, negotiable order of withdrawal (NOW) accounts, savings accounts, money market accounts, certificates of deposit, individual retirement accounts and other time deposits. The Bank offers commercial and industrial, agricultural, real estate mortgage and consumer loans.
About Macatawa Bank Corporation
Macatawa Bank Corporation is a bank holding company. The Company, through its subsidiary, Macatawa Bank (the Bank), offers a range of commercial and personal banking services, including checking, savings and certificates of deposit accounts, cash management, safe deposit boxes, trust services and commercial, mortgage and consumer loans. The Bank is a Michigan chartered bank with depository accounts insured by the Federal Deposit Insurance Corporation. Its other services include automated teller machines (ATMs), Internet banking, telephone banking and debit cards. The Bank provides various brokerage services, including discount brokerage through Infinex, personal financial planning and consultation regarding mutual funds. As of December 31, 2016, the Bank operated 26 full service branch offices providing a range of commercial and consumer banking and trust services in Kent County, Ottawa County, and northern Allegan County, Michigan.
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