Critical Analysis: Malayan Banking Berhad (OTCMKTS:MLYBY) versus Mechanics Bank (OTC:MCHB)

Malayan Banking Berhad (OTCMKTS:MLYBY) and Mechanics Bank (OTC:MCHB) are both financial services companies, but which is the better stock? We will compare the two companies based on the strength of their risk, profitability, earnings, institutional ownership, analyst recommendations, valuation and dividends.

Valuation & Earnings

This table compares Malayan Banking Berhad and Mechanics Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Malayan Banking Berhad	N/A	N/A	N/A	$1.45	4.87
Mechanics Bank	$650.13 million	5.17	$70.79 million	$0.32	47.47

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Malayan Banking Berhad and Mechanics Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Malayan Banking Berhad	0	0	0	1	4.00
Mechanics Bank	0	1	0	0	2.00

Profitability

This table compares Malayan Banking Berhad and Mechanics Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Malayan Banking Berhad	N/A	N/A	N/A
Mechanics Bank	N/A	N/A	N/A

Dividends

Malayan Banking Berhad pays an annual dividend of $0.24 per share and has a dividend yield of 3.4%. Mechanics Bank pays an annual dividend of $0.84 per share and has a dividend yield of 5.5%. Malayan Banking Berhad pays out 16.5% of its earnings in the form of a dividend. Mechanics Bank pays out 262.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

0.1% of Malayan Banking Berhad shares are owned by institutional investors. Comparatively, 74.7% of Mechanics Bank shares are owned by institutional investors. 4.6% of Mechanics Bank shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Mechanics Bank beats Malayan Banking Berhad on 5 of the 9 factors compared between the two stocks.

About Malayan Banking Berhad

Malayan Banking Berhad provides commercial banking and related financial products and services. The company operates through three segments: Group Community Financial Services, Group Global Banking, and Group Insurance and Takaful. It offers savings and fixed deposits, and current accounts; and housing and personal loans, project financing, overdrafts, and trade financing, as well as remittance services. The company also offers credit cards; bancassurance products; hire purchase, unit trust, cash management, custodian, and trustee services; and treasury activities and services, including foreign exchange, money market, derivatives, and trading of capital market. In addition, it provides investment banking and securities broking services comprising corporate advisory, bond and equity issuance, syndicated acquisition advisory, debt restructuring advisory, and share and futures dealings; and asset and fund management services, including a range of conventional and Islamic investment solutions. Further, the company underwrites general and life insurance businesses, offshore investment life insurance business, and general and family takaful products; and offers offshore banking, bureau, property leasing and trading, nominee, property investment, business/economic consultancy and advisory, IT shared and development, financial and investment advisory, money lending, private equity investments, research, and leasing and factoring services. It serves individuals, corporates, financial institutions, government entities/agencies, and commercial customers, as well as micro, small and medium enterprises in Malaysia, Singapore, Indonesia, the Philippines, Brunei Darussalam, the People’s Republic of China, Hong Kong SAR, Vietnam, the United Kingdom, United States of America, Cambodia, Laos, Myanmar, Labuan Offshore, and Thailand. Malayan Banking Berhad was incorporated in 1960 and is headquartered in Kuala Lumpur, Malaysia.

About Mechanics Bank

Mechanics Bank provides various financial services for individuals, families, small businesses, municipalities, and non-profits in communities in Greater San Francisco, Sacramento, Los Angeles, and San Diego areas and throughout the Central Valley in California. The company offers checking and savings accounts. It also provides home and auto loans; term loans and lines of credit, multi-family lending, commercial real estate loans, owner-occupied real estate loans, equipment financing, and trade services and letters of credit; and small business administration loans. In addition, the company offers credit and debit cards; payable and receivable solutions, fraud prevention, and cash management services; merchant and payroll services, paycheck protection program solutions, and workplace benefit plans; foreign currency, cashier's checks, wire transfers, overdraft, deposit and treasury, trust and estate, investment and asset management, retirement planning, and wealth management services; and online and mobile banking services. Mechanics Bank was founded in 1905 and is headquartered in Walnut Creek, California.