Bank of N.T. Butterfield & Son Limited (The) (NYSE: NTB) and Macatawa Bank Corporation (NASDAQ:MCBC) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Institutional and Insider Ownership

71.1% of Bank of N.T. Butterfield & Son Limited (The) shares are held by institutional investors. Comparatively, 27.2% of Macatawa Bank Corporation shares are held by institutional investors. 8.7% of Macatawa Bank Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Bank of N.T. Butterfield & Son Limited (The) and Macatawa Bank Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of N.T. Butterfield & Son Limited (The) 19.54% 17.93% 1.31%
Macatawa Bank Corporation 24.52% 10.86% 1.04%

Dividends

Bank of N.T. Butterfield & Son Limited (The) pays an annual dividend of $1.28 per share and has a dividend yield of 3.5%. Macatawa Bank Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 1.9%. Bank of N.T. Butterfield & Son Limited (The) pays out 84.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Macatawa Bank Corporation pays out 37.7% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Bank of N.T. Butterfield & Son Limited (The) and Macatawa Bank Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of N.T. Butterfield & Son Limited (The) 0 1 1 0 2.50
Macatawa Bank Corporation 0 1 0 0 2.00

Bank of N.T. Butterfield & Son Limited (The) presently has a consensus target price of $37.50, suggesting a potential upside of 3.91%. Macatawa Bank Corporation has a consensus target price of $10.00, suggesting a potential downside of 3.94%. Given Bank of N.T. Butterfield & Son Limited (The)’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Bank of N.T. Butterfield & Son Limited (The) is more favorable than Macatawa Bank Corporation.

Valuation & Earnings

This table compares Bank of N.T. Butterfield & Son Limited (The) and Macatawa Bank Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bank of N.T. Butterfield & Son Limited (The) $427.52 million 4.61 $82.96 million $1.52 23.74
Macatawa Bank Corporation $69.91 million 5.05 $17.99 million $0.53 19.64

Bank of N.T. Butterfield & Son Limited (The) has higher revenue and earnings than Macatawa Bank Corporation. Macatawa Bank Corporation is trading at a lower price-to-earnings ratio than Bank of N.T. Butterfield & Son Limited (The), indicating that it is currently the more affordable of the two stocks.

Summary

Bank of N.T. Butterfield & Son Limited (The) beats Macatawa Bank Corporation on 11 of the 15 factors compared between the two stocks.

Bank of N.T. Butterfield & Son Limited (The) Company Profile

The Bank of N.T. Butterfield & Son Limited (the Bank) provides banking services and wealth management services. The Bank’s geographic segments include Bermuda, the Cayman Islands and Guernsey, where its banking operations are located, and The Bahamas, Switzerland, and the United Kingdom, where it offers specialized financial services. It offers banking services, including retail and corporate banking, and wealth management, which consists of trust, private banking, and asset management. In Bermuda and Cayman Islands segments, it offers both banking and wealth management. In Guernsey, Bahamas, and Switzerland segments, it offers wealth management. In the United Kingdom segment, it offers residential property lending. The Bank provides foreign exchange services in the normal course of business in all jurisdictions. Its wealth management platform has three lines of business: trust, private banking, and asset management.

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.

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