Hilltop (NYSE:HTH – Get Free Report) and M&F Bancorp (OTCMKTS:MFBP – Get Free Report) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitability.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Hilltop and M&F Bancorp, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Hilltop | 0 | 2 | 1 | 1 | 2.75 |
| M&F Bancorp | 0 | 0 | 0 | 0 | 0.00 |
Hilltop currently has a consensus target price of $37.50, indicating a potential upside of 1.00%. Given Hilltop’s stronger consensus rating and higher probable upside, equities analysts clearly believe Hilltop is more favorable than M&F Bancorp.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Hilltop | $1.20 billion | 1.81 | $165.59 million | $2.64 | 14.06 |
| M&F Bancorp | $29.72 million | 1.64 | $4.30 million | $1.52 | 16.51 |
Hilltop has higher revenue and earnings than M&F Bancorp. Hilltop is trading at a lower price-to-earnings ratio than M&F Bancorp, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Hilltop and M&F Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Hilltop | 10.13% | 7.32% | 1.03% |
| M&F Bancorp | N/A | N/A | N/A |
Volatility and Risk
Hilltop has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, M&F Bancorp has a beta of -0.55, suggesting that its stock price is 155% less volatile than the S&P 500.
Dividends
Hilltop pays an annual dividend of $0.80 per share and has a dividend yield of 2.2%. M&F Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.0%. Hilltop pays out 30.3% of its earnings in the form of a dividend. M&F Bancorp pays out 15.8% 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. Hilltop has increased its dividend for 8 consecutive years. Hilltop is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
57.1% of Hilltop shares are held by institutional investors. 29.9% of Hilltop shares are held by company insiders. Comparatively, 2.9% of M&F Bancorp shares are held by company 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.
Summary
Hilltop beats M&F Bancorp on 16 of the 18 factors compared between the two stocks.
About Hilltop
Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.
About M&F Bancorp
M&F Bancorp, Inc. operates as a bank holding company for the Mechanics and Farmers Bank that provides consumer and commercial banking products and services in North Carolina. It offers deposit products, including demand deposits; checking, savings, and money market accounts, as well as certificates of deposit. The company provides loans for commercial and residential real estate, and construction; and consumer and other loans; as well as ATM services. M&F Bancorp, Inc. was founded in 1907 and is headquartered in Durham, North Carolina.
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