Metropolitan Bank (NYSE:MCB) versus Magyar Bancorp (NASDAQ:MGYR) Financial Analysis

Magyar Bancorp (NASDAQ:MGYR) and Metropolitan Bank (NYSE:MCB) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, risk, dividends and profitability.

Dividends

Magyar Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.3%. Metropolitan Bank pays an annual dividend of $0.80 per share and has a dividend yield of 1.0%. Magyar Bancorp pays out 23.1% of its earnings in the form of a dividend. Metropolitan Bank pays out 12.0% 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. Magyar Bancorp has raised its dividend for 3 consecutive years. Magyar Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Magyar Bancorp has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500. Comparatively, Metropolitan Bank has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Magyar Bancorp and Metropolitan Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magyar Bancorp	0	1	0	0	2.00
Metropolitan Bank	0	1	2	1	3.00

Metropolitan Bank has a consensus price target of $92.00, indicating a potential upside of 12.23%. Given Metropolitan Bank’s stronger consensus rating and higher probable upside, analysts clearly believe Metropolitan Bank is more favorable than Magyar Bancorp.

Earnings & Valuation

This table compares Magyar Bancorp and Metropolitan Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magyar Bancorp	$36.86 million	3.07	$9.76 million	$1.73	10.10
Metropolitan Bank	$527.15 million	1.93	$71.10 million	$6.65	12.33

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

Insider and Institutional Ownership

46.3% of Magyar Bancorp shares are owned by institutional investors. Comparatively, 79.8% of Metropolitan Bank shares are owned by institutional investors. 11.1% of Magyar Bancorp shares are owned by insiders. Comparatively, 6.1% of Metropolitan Bank shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Magyar Bancorp and Metropolitan Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magyar Bancorp	16.25%	9.18%	1.07%
Metropolitan Bank	13.49%	9.69%	0.89%

Summary

Metropolitan Bank beats Magyar Bancorp on 12 of the 18 factors compared between the two stocks.

About Magyar Bancorp

Magyar Bancorp, Inc. operates as the holding company for Magyar Bank that provides various consumer and commercial banking services to individuals, businesses, and nonprofit organizations in New Jersey, the United States. It accepts various deposit accounts, including demand, savings, NOW, money market, and retirement accounts, as well as certificates of deposit. The company also provides residential mortgage loans, multi-family and commercial real estate mortgage loans, home equity loans and lines of credit, commercial business loans, and construction loans, as well as small business administration loans. In addition, it offers non-deposit investment products and financial planning services, including insurance products, fixed and variable annuities, and retirement planning for individual and commercial customers; and buys, sells, and holds investment securities. The company has branch offices located in New Brunswick, North Brunswick, South Brunswick, Branchburg, Bridgewater, and Edison, New Jersey. Magyar Bancorp, Inc. was founded in 1922 and is headquartered in New Brunswick, New Jersey.

About Metropolitan Bank

Metropolitan Bank Holding Corp. operates as the bank holding company for Metropolitan Commercial Bank that provides a range of business, commercial, and retail banking products and services to small businesses, middle-market enterprises, public entities, and individuals in the New York metropolitan area. The company offers checking, savings, term deposit, money market, demand deposit, and other interest-bearing transaction accounts. It also provides lending products, including commercial real estate, multi-family, construction, and one-to four-family real estate loans; commercial and industrial loans; consumer loans; acquisition and renovation loans; loans to refinance or return borrower equity; loans on owner-occupied properties; working capital lines of credit; trade finance and letters of credit; and term loans. In addition, the company offers cash management services, as well as online and mobile banking, ACH, remote deposit capture, and debit cards. The company was formerly known as Metbank Holding Corp. and changed its name to Metropolitan Bank Holding Corp. in January 2007. Metropolitan Bank Holding Corp. was incorporated in 1997 and is headquartered in New York, New York.