Macatawa Bank (NASDAQ:MCBC – Get Free Report) and Central Pacific Financial (NYSE:CPF – Get Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.
Profitability
This table compares Macatawa Bank and Central Pacific Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Macatawa Bank | 30.56% | 14.73% | 1.53% |
| Central Pacific Financial | 16.44% | 11.34% | 0.73% |
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Macatawa Bank and Central Pacific Financial, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Macatawa Bank | 0 | 0 | 3 | 0 | 3.00 |
| Central Pacific Financial | 0 | 0 | 1 | 0 | 3.00 |
Dividends
Macatawa Bank pays an annual dividend of $0.36 per share and has a dividend yield of 2.4%. Central Pacific Financial pays an annual dividend of $1.04 per share and has a dividend yield of 4.2%. Macatawa Bank pays out 30.0% of its earnings in the form of a dividend. Central Pacific Financial pays out 50.7% 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.
Insider & Institutional Ownership
42.5% of Macatawa Bank shares are owned by institutional investors. Comparatively, 88.4% of Central Pacific Financial shares are owned by institutional investors. 8.6% of Macatawa Bank shares are owned by insiders. Comparatively, 2.7% of Central Pacific Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Macatawa Bank and Central Pacific Financial’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Macatawa Bank | $132.25 million | 3.85 | $43.22 million | $1.20 | 12.33 |
| Central Pacific Financial | $329.32 million | 2.01 | $58.67 million | $2.05 | 11.95 |
Central Pacific Financial has higher revenue and earnings than Macatawa Bank. Central Pacific Financial is trading at a lower price-to-earnings ratio than Macatawa Bank, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Macatawa Bank has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, Central Pacific Financial has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500.
Summary
Macatawa Bank beats Central Pacific Financial on 8 of the 15 factors compared between the two stocks.
About Macatawa Bank
Macatawa Bank Corporation operates as the bank holding company for Macatawa Bank that engages in the provision of commercial and consumer banking and trust services. The company accepts various deposits, such as checking accounts, savings accounts, time deposits, regular and money market savings accounts, certificates of deposit, and demand deposits. Its loan products include commercial and industrial loans comprising loans to finance operations and equipment; commercial real estate loans, which consist of construction and development, multi-family, and other non-residential real estate loans; and residential mortgage loans, as well as consumer loans, including automobile loans, home equity lines of credit and installment loans, home improvement loans, deposit account loans, and other loans for household and personal purposes. The company also offers ATM and debit card processing, cash management, and brokerage services. In addition, it provides asset management, personal trust, and retirement plan services. It serves individuals, businesses, associations, churches, nonprofit organizations, financial institutions, and government authorities. The company was incorporated in 1997 and is based in Holland, Michigan.
About Central Pacific Financial
Central Pacific Financial Corp. operates as the bank holding company for Central Pacific Bank that provides a range of commercial banking products and services to businesses, professionals, and individuals in the United States. It offers various deposit products and services, including checking, savings and time deposits, cash management and digital banking, trust, and retail brokerage services, as well as money market accounts and certificates of deposit. The company also provides various lending activities, such as commercial, commercial and residential mortgage, home equity, and consumer loans; and other products and services comprising debit cards, internet and mobile banking, cash management services, full-service ATMs, safe deposit boxes, international banking services, night depository facilities, foreign exchange, and wire transfers. In addition, it offers wealth management products and services that include non-deposit investment products, annuities, insurance, investment management, asset custody and general consultation, and planning services. The company was founded in 1954 and is headquartered in Honolulu, Hawaii.
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