Mackinac Financial Corporation (NASDAQ: MFNC) and Heartland Financial USA (NASDAQ:HTLF) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.
Valuation & Earnings
This table compares Mackinac Financial Corporation and Heartland Financial USA’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Mackinac Financial Corporation||$39.85 million||2.37||$6.86 million||$1.09||13.76|
|Heartland Financial USA||$386.37 million||3.44||$90.95 million||$3.04||14.62|
Heartland Financial USA has higher revenue and earnings than Mackinac Financial Corporation. Mackinac Financial Corporation is trading at a lower price-to-earnings ratio than Heartland Financial USA, indicating that it is currently the more affordable of the two stocks.
This table compares Mackinac Financial Corporation and Heartland Financial USA’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Mackinac Financial Corporation||14.88%||8.79%||0.71%|
|Heartland Financial USA||18.38%||10.48%||0.96%|
Mackinac Financial Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 3.2%. Heartland Financial USA pays an annual dividend of $0.44 per share and has a dividend yield of 1.0%. Mackinac Financial Corporation pays out 44.0% of its earnings in the form of a dividend. Heartland Financial USA pays out 14.5% 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.
Institutional & Insider Ownership
29.2% of Mackinac Financial Corporation shares are held by institutional investors. Comparatively, 42.4% of Heartland Financial USA shares are held by institutional investors. 25.9% of Mackinac Financial Corporation shares are held by insiders. Comparatively, 9.0% of Heartland Financial USA shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This is a summary of recent ratings and price targets for Mackinac Financial Corporation and Heartland Financial USA, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Mackinac Financial Corporation||0||0||0||0||N/A|
|Heartland Financial USA||0||2||0||0||2.00|
Heartland Financial USA has a consensus target price of $51.50, suggesting a potential upside of 15.86%. Given Heartland Financial USA’s higher probable upside, analysts plainly believe Heartland Financial USA is more favorable than Mackinac Financial Corporation.
Volatility & Risk
Mackinac Financial Corporation has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, Heartland Financial USA has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500.
Heartland Financial USA beats Mackinac Financial Corporation on 12 of the 14 factors compared between the two stocks.
Mackinac Financial Corporation Company Profile
Mackinac Financial Corporation is a bank holding Company of mBank (the Bank). The Company, through the Bank, is engaged in the general commercial banking business. The Bank provides a range of loan and deposit products. These banking services include customary retail and commercial banking services, including checking and savings accounts, time deposits, interest bearing transaction accounts, safe deposit facilities, real estate mortgage lending, commercial lending, commercial and governmental lease financing, and direct and indirect consumer financing. The funds for the Bank’s operation are also provided by brokered deposits and through borrowings from the Federal Home Loan Bank (FHLB) system, proceeds from the sale of loans and mortgage-backed and other securities, funds from repayment of outstanding loans and earnings from operations. The Bank has over 13 branch offices located in the Upper Peninsula of Michigan and four branch offices located in Michigan’s Lower Peninsula.
Heartland Financial USA Company Profile
Heartland Financial USA, Inc. (Heartland) is a diversified financial services company engaged in providing banking, mortgage, private client, investment, treasury management, card services, insurance, and consumer finance services to individuals and businesses. Its segments include community and other banking, and retail mortgage banking. Its community and other banking segment is engaged in making loans to, and generating deposits from, individuals and businesses in the markets where Heartland has banks. Its retail mortgage banking segment is engaged in the origination of residential loans and subsequent sale of those loans to investors. The Company conducts its community banking business through independently chartered community banks (collectively, the Bank Subsidiaries). Its securities portfolio consists of United States Government corporations and agencies, mortgage-backed securities and other securities. Its loans include commercial, commercial real estate and consumer loans.
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