Reviewing First Financial (NASDAQ:THFF) & M&F Bancorp (OTCMKTS:MFBP)

First Financial (NASDAQ:THFF) and M&F Bancorp (OTCMKTS:MFBP) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares First Financial and M&F Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial	22.38%	12.13%	1.25%
M&F Bancorp	N/A	N/A	N/A

Valuation & Earnings

This table compares First Financial and M&F Bancorp’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial	$271.10 million	1.58	$60.67 million	$5.09	7.14
M&F Bancorp	N/A	N/A	N/A	N/A	N/A

First Financial has higher revenue and earnings than M&F Bancorp.

Analyst Recommendations

This is a summary of recent ratings and price targets for First Financial and M&F Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial	0	1	0	0	2.00
M&F Bancorp	0	0	0	0	N/A

First Financial presently has a consensus target price of $43.00, indicating a potential upside of 18.33%. Given First Financial’s higher possible upside, research analysts clearly believe First Financial is more favorable than M&F Bancorp.

Volatility and Risk

First Financial has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, M&F Bancorp has a beta of -0.16, suggesting that its stock price is 116% less volatile than the S&P 500.

Dividends

First Financial pays an annual dividend of $0.90 per share and has a dividend yield of 2.5%. M&F Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.6%. First Financial pays out 17.7% of its earnings in the form of a dividend.

Insider & Institutional Ownership

72.8% of First Financial shares are held by institutional investors. 3.7% of First Financial shares are held by insiders. Comparatively, 2.9% of M&F Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

First Financial beats M&F Bancorp on 9 of the 10 factors compared between the two stocks.

About First Financial

First Financial Corporation, through its subsidiaries, provides various financial services. The company offers non-interest-bearing demand, interest-bearing demand, savings, time, and other time deposits. It also provides commercial loans primarily to expand a business or finance asset purchases; residential real estate and residential real estate construction loans; and home equity loans and lines, secured loans, and cash/CD secured and unsecured loans. In addition, the company offers lease financing, trust account, depositor, and insurance services. The company was founded in 1834 and is headquartered in Terre Haute, Indiana.

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 also provides loans for commercial and residential real estate, and construction; and consumer loans, as well as ATM services. The company was founded in 1907 and is headquartered in Durham, North Carolina.