Analyzing Magyar Bancorp (NASDAQ:MGYR) & Pioneer Bankshares (OTCMKTS:PNBI)

Pioneer Bankshares (OTCMKTS:PNBI) and Magyar Bancorp (NASDAQ:MGYR) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Dividends

Pioneer Bankshares pays an annual dividend of $1.12 per share and has a dividend yield of 2.6%. Magyar Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.2%. Pioneer Bankshares pays out 28.1% of its earnings in the form of a dividend. Magyar Bancorp pays out 22.5% 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. Magyar Bancorp has raised its dividend for 3 consecutive years.

Earnings & Valuation

This table compares Pioneer Bankshares and Magyar Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pioneer Bankshares	$20.97 million	2.05	$3.98 million	$3.98	10.68
Magyar Bancorp	$37.77 million	3.05	$9.76 million	$1.78	10.00

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Pioneer Bankshares	18.99%	N/A	N/A
Magyar Bancorp	18.32%	9.28%	1.09%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Pioneer Bankshares and Magyar Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pioneer Bankshares	0	0	0	0	0.00
Magyar Bancorp	0	1	0	0	2.00

Insider and Institutional Ownership

46.3% of Magyar Bancorp shares are held by institutional investors. 13.7% of Pioneer Bankshares shares are held by company insiders. Comparatively, 11.1% of Magyar Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Pioneer Bankshares has a beta of 0.15, meaning that its stock price is 85% less volatile than the S&P 500. Comparatively, Magyar Bancorp has a beta of 0.22, meaning that its stock price is 78% less volatile than the S&P 500.

Summary

Magyar Bancorp beats Pioneer Bankshares on 10 of the 15 factors compared between the two stocks.

About Pioneer Bankshares

Pioneer Bankshares, Inc. operates as the bank holding company for Pioneer Bank, Inc. that provides various banking and related financial services to individual consumers, small to medium size businesses, and professional community in the United States. The company offers various deposit products, which include business and personal checking accounts, savings accounts, and certificates of deposit. Its personal loans comprise personal installment and single-pay, and auto loans; and business loans consists of operating capital, equipment loans, investment properties, lines of credit, business expansion, and property acquisition or construction, as well as home mortgage and home equity loans. In addition, the company provides credit and debit cards, safe deposit boxes, online and mobile banking tools, merchant services, and cash management services. Further, it offers investment products, such as individual retirement accounts, 529 college savings plans, small business investment strategies, fixed, and variable annuities. Additionally, the company provides personalized investment advisory services, as well as securities and insurance products and services. Pioneer Bankshares, Inc. was founded in 1909 and is headquartered in Stanley, Virginia.

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.