Head to Head Analysis: Mechanics Bank (OTC:MCHB) versus Close Brothers Group (OTCMKTS:CBGPY)

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Mechanics Bank and Close Brothers Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mechanics Bank	0	1	0	0	2.00
Close Brothers Group	0	0	1	0	3.00

Insider & Institutional Ownership

74.7% of Mechanics Bank shares are held by institutional investors. 4.6% of Mechanics Bank shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Mechanics Bank and Close Brothers Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mechanics Bank	N/A	N/A	N/A
Close Brothers Group	N/A	N/A	N/A

Dividends

Mechanics Bank pays an annual dividend of $0.84 per share and has a dividend yield of 5.6%. Close Brothers Group pays an annual dividend of $0.86 per share and has a dividend yield of 6.5%. 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. Close Brothers Group pays out 43.2% of its earnings in the form of a dividend. Close Brothers Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Mechanics Bank and Close Brothers Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mechanics Bank	$650.13 million	5.11	$70.79 million	$0.32	46.94
Close Brothers Group	N/A	N/A	N/A	$2.00	6.64

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

Summary

Close Brothers Group beats Mechanics Bank on 5 of the 9 factors compared between the two stocks.

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.

About Close Brothers Group

Close Brothers Group plc, a merchant banking company, engages in the provision of financial services to small businesses and individuals in the United Kingdom. It operates through five segments: Commercial, Retail, Property, Asset Management, and Securities. The company offers banking services comprising of debt factoring, invoice discounting, asset-based lending; financing for SMEs, residential housing, transport, industrial equipment, renewable energy, motorcycle, used car, and commercial vehicle financing; insurance, refurbishment, and bridging financing, savings products for individuals and corporates, hire purchase, lease, and loan related services. In addition, it provides asset management services, such as investment management solutions; financial planning, custody, and tax services. Further, the company offers investment advisory and broking and trading related services, as well as provides funding services for general aviation aircraft, and various leisure and commercial marine vessels; and brewery rentals. Additionally, it provides leasing services for commercial vehicles, machine tools, contractor plant, printing equipment, car fleets, aircraft and marine vessels, and energy project. Furthermore, the company offers financing services to the professional service sector, including dental, accounting, opticians, legal, funeral, veterinary, medical, and pharmaceutical sectors. It provides self-directed services that help investors to manage their portfolio online; and services for financial advisers; and liquidity and flexible execution services to retail stockbrokers, wealth managers, and institutional investors. The company offers market making, sales, research, and corporate broking services; and dealing, custody, and settlement services to the institutional, wealth management, and brokerage clients. Close Brothers Group plc was founded in 1878 and is headquartered in London, the United Kingdom.