Critical comparison: Macatawa Bank (NASDAQ: MCBC) versus Enterprise Financial Services (NASDAQ: EFSC)


Business Financial Services (NASDAQ: EFSCGet a rating) and Macatawa Bank (NASDAQ: MCBCGet a rating) are both small cap finance companies, but which business is superior? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Profitability

This table compares the net margins, return on equity and return on assets of Enterprise Financial Services and Macatawa Bank.

Net margins Return on equity return on assets
Business Financial Services 31.42% 13.65% 1.46%
Macatawa Bank 34.64% 10.89% 0.93%

Valuation and benefits

This table compares the revenue, earnings per share (EPS) and valuation of Enterprise Financial Services and Macatawa Bank.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Business Financial Services $450.97 million 3.83 $133.05 million $4.17 11.11
Macatawa Bank $82.33 million 3.84 $29.01 million $0.80 11.54

Enterprise Financial Services has higher revenue and profit than Macatawa Bank. Enterprise Financial Services trades at a lower price-to-earnings ratio than Macatawa Bank, indicating that it is currently the more affordable of the two stocks.

Dividends

Enterprise Financial Services pays an annual dividend of $0.84 per share and has a dividend yield of 1.8%. Macatawa Bank pays an annual dividend of $0.32 per share and has a dividend yield of 3.5%. Enterprise Financial Services pays 20.1% of its profits as a dividend. Macatawa Bank pays 40.0% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Enterprise Financial Services has increased its dividend for 5 consecutive years.

Analyst Notes

This is a breakdown of the current recommendations for Enterprise Financial Services and Macatawa Bank, as provided by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Business Financial Services 0 0 2 0 3.00
Macatawa Bank 0 0 0 0 N / A

Enterprise Financial Services currently has a consensus price target of $58.00, suggesting a potential upside of 25.19%. Given the higher possible upside of Enterprise Financial Services, research analysts clearly believe that Enterprise Financial Services is more favorable than Macatawa Bank.

Institutional and Insider Ownership

67.1% of Enterprise Financial Services shares are held by institutional investors. By comparison, 38.5% of Macatawa Bank’s shares are held by institutional investors. 5.9% of Enterprise Financial Services stock is held by company insiders. By comparison, 8.4% of Macatawa Bank’s shares are held by insiders of the company. Strong institutional ownership indicates that large fund managers, hedge funds, and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Enterprise Financial Services has a beta of 1.17, which means its stock price is 17% more volatile than the S&P 500. In comparison, Macatawa Bank has a beta of 0.71, which means its stock price is 29% less volatile than the S&P 500.

Summary

Enterprise Financial Services beat Macatawa Bank on 11 out of 16 factors compared between the two stocks.

Corporate Financial Services Company Profile (Get a rating)

Enterprise Financial Services Corp operates as a financial holding company for Enterprise Bank & Trust which offers banking and wealth management services to individuals and businesses. The company offers checking, savings and money market accounts, as well as certificates of deposit. It also offers commercial and industrial real estate, commercial, construction and land development, residential real estate, agricultural and consumer loans. In addition, the company offers cash management and international trade services; tax credit brokerage services consisting of the acquisition of tax credits and the sale of these tax credits to clients; and financial and estate planning, investment management and trust services to businesses, individuals, institutions, pension plans and not-for-profit organizations. In addition, it offers fiduciary, financial advisory and merchant processing services; and debit and credit cards. In addition, the company provides international banking, insurance, internet and mobile banking, remote deposit collection, positive payment, fraud detection and prevention, automated payments, imaging checks and imaging of statements and documents; and cash management products, controlled disbursements, repurchase agreements and scanning investment accounts. It operates banking sites and administrative offices in market areas of Arizona, California, Kansas, Missouri, Nevada and New Mexico, as well as a network of SBA loan origination offices and of filing production offices in various states. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.

Macatawa Bank Company Profile (Get a rating)

Macatawa Bank Corporation operates as a bank holding company for Macatawa Bank which provides corporate and consumer banking and trust services. The Company accepts various deposits, such as checking accounts, savings accounts, term deposits, ordinary and money market savings accounts, certificates of deposit and demand deposits. Its lending products include commercial and industrial loans including loans to finance operations and equipment; commercial real estate loans, which consist of real estate loans for construction and development, multifamily and other non-residential real estate; and residential mortgages, as well as consumer loans, including auto loans, home equity lines of credit and installment loans, home improvement loans, deposit account loans and other loans for household and personal purposes. The company also offers debit card and ATM processing, cash management, trust and brokerage services. In addition, it offers protection against fraud; collection services; disbursement solutions; fund management; and investment and pension plan services. It serves individuals, businesses, associations, churches, non-profit organizations, financial institutions and government authorities. As of December 31, 2021, the company had 26 full-service branches in Kent, Ottawa and the northern counties of Allegan, Michigan. Macatawa Bank Corporation was incorporated in 1997 and is based in Holland, Michigan.



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