Head to Head Survey: Macatawa Bank Corporation (MCBC) vs. MidWestOne Financial Group (MOFG)

Macatawa Bank Corporation (NASDAQ: MCBC) and MidWestOne Financial Group (NASDAQ:MOFG) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Macatawa Bank Corporation and MidWestOne Financial Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Macatawa Bank Corporation 0 1 0 0 2.00
MidWestOne Financial Group 0 1 1 0 2.50

Macatawa Bank Corporation presently has a consensus target price of $10.00, suggesting a potential downside of 3.10%. MidWestOne Financial Group has a consensus target price of $38.50, suggesting a potential upside of 8.48%. Given MidWestOne Financial Group’s stronger consensus rating and higher probable upside, analysts clearly believe MidWestOne Financial Group is more favorable than Macatawa Bank Corporation.

Institutional and Insider Ownership

27.2% of Macatawa Bank Corporation shares are owned by institutional investors. Comparatively, 46.4% of MidWestOne Financial Group shares are owned by institutional investors. 8.7% of Macatawa Bank Corporation shares are owned by company insiders. Comparatively, 25.3% of MidWestOne Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Macatawa Bank Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 1.9%. MidWestOne Financial Group pays an annual dividend of $0.68 per share and has a dividend yield of 1.9%. Macatawa Bank Corporation pays out 37.7% of its earnings in the form of a dividend. MidWestOne Financial Group pays out 33.2% 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.

Profitability

This table compares Macatawa Bank Corporation and MidWestOne Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Macatawa Bank Corporation 24.52% 10.86% 1.04%
MidWestOne Financial Group 17.60% 7.55% 0.79%

Volatility & Risk

Macatawa Bank Corporation has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, MidWestOne Financial Group has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Valuation & Earnings

This table compares Macatawa Bank Corporation and MidWestOne Financial Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Macatawa Bank Corporation $69.91 million 5.01 $17.99 million $0.53 19.47
MidWestOne Financial Group $114.71 million 3.78 $25.05 million $2.05 17.31

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.

Summary

MidWestOne Financial Group beats Macatawa Bank Corporation on 10 of the 16 factors compared between the two stocks.

Macatawa Bank Corporation Company Profile

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.

MidWestOne Financial Group Company Profile

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.

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