Bank of Marin Bancorp (NASDAQ: BMRC) and Mackinac Financial (NASDAQ:MFNC) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.

Institutional & Insider Ownership

44.4% of Bank of Marin Bancorp shares are held by institutional investors. Comparatively, 28.4% of Mackinac Financial shares are held by institutional investors. 5.2% of Bank of Marin Bancorp shares are held by company insiders. Comparatively, 24.2% of Mackinac Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Bank of Marin Bancorp has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, Mackinac Financial has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Bank of Marin Bancorp and Mackinac Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of Marin Bancorp 0 4 0 0 2.00
Mackinac Financial 0 0 0 0 N/A

Bank of Marin Bancorp presently has a consensus price target of $69.50, indicating a potential upside of 3.50%. Given Bank of Marin Bancorp’s higher possible upside, analysts plainly believe Bank of Marin Bancorp is more favorable than Mackinac Financial.

Profitability

This table compares Bank of Marin Bancorp and Mackinac Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of Marin Bancorp 24.74% 8.85% 1.01%
Mackinac Financial 15.17% 9.06% 0.73%

Dividends

Bank of Marin Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 1.7%. Mackinac Financial pays an annual dividend of $0.48 per share and has a dividend yield of 3.0%. Bank of Marin Bancorp pays out 34.7% of its earnings in the form of a dividend. Mackinac Financial pays out 42.1% 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.

Valuation and Earnings

This table compares Bank of Marin Bancorp and Mackinac Financial’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Bank of Marin Bancorp $84.59 million 4.91 $23.13 million $3.34 20.10
Mackinac Financial $42.14 million 2.39 $4.48 million $1.14 14.04

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

Summary

Bank of Marin Bancorp beats Mackinac Financial on 11 of the 14 factors compared between the two stocks.

About Bank of Marin Bancorp

Bank of Marin Bancorp (Bancorp) is the holding company for Bank of Marin (the Bank). The Company’s business banking focus is on small to medium-sized businesses, professionals and not-for-profit organizations. As of December 31, 2016, the Company operated through 20 offices in Marin, Sonoma, San Francisco, Napa and Alameda counties. It makes international banking services available to its customers indirectly through other financial institutions, with whom it has correspondent banking relationships. The Company offers a range of commercial and retail deposit and lending programs. Its lending categories include commercial real estate loans, commercial and industrial loans, construction financing, consumer loans and home equity lines of credit. The Company offers a range of personal and business checking and savings accounts, and time deposit alternatives.

About Mackinac Financial

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.

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