Reviewing Magyar Bancorp (NASDAQ:MGYR) and Fulton Financial (NASDAQ:FULT)

Fulton Financial (NASDAQ:FULT) and Magyar Bancorp (NASDAQ:MGYR) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations for Fulton Financial and Magyar Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fulton Financial	0	4	2	0	2.33
Magyar Bancorp	0	1	0	0	2.00

Fulton Financial presently has a consensus price target of $23.50, indicating a potential downside of 3.85%. Given Fulton Financial’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Fulton Financial is more favorable than Magyar Bancorp.

Volatility and Risk

Fulton Financial has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Magyar Bancorp has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500.

Earnings & Valuation

This table compares Fulton Financial and Magyar Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fulton Financial	$1.89 billion	2.47	$391.61 million	$2.10	11.64
Magyar Bancorp	$37.77 million	3.03	$9.76 million	$1.78	9.94

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

Dividends

Fulton Financial pays an annual dividend of $0.76 per share and has a dividend yield of 3.1%. Magyar Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.3%. Fulton Financial pays out 36.2% 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. Fulton Financial has increased its dividend for 4 consecutive years and Magyar Bancorp has increased its dividend for 3 consecutive years. Fulton Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fulton Financial	20.85%	12.69%	1.28%
Magyar Bancorp	18.32%	9.28%	1.09%

Institutional & Insider Ownership

72.0% of Fulton Financial shares are held by institutional investors. Comparatively, 46.3% of Magyar Bancorp shares are held by institutional investors. 0.0% of Fulton Financial shares are held by insiders. Comparatively, 11.1% of Magyar Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Fulton Financial beats Magyar Bancorp on 14 of the 17 factors compared between the two stocks.

About Fulton Financial

Fulton Financial Corporation operates as a financial holding company that provides consumer and commercial banking products and services in Pennsylvania, Delaware, Maryland, New Jersey, and Virginia. It accepts various checking accounts and savings deposit products, certificates of deposit, and individual retirement accounts. The company offers consumer loans products, including home equity loans and lines of credit, automobile loans, personal lines of credit, and checking account overdraft protection; construction and jumbo residential mortgage loans; and commercial lending products comprising commercial real estate, commercial and industrial, and construction loans, as well as equipment lease financing loans. In addition, it offers letters of credit, cash management services, and traditional deposit products; and wealth management services, including investment management, trust, brokerage, insurance, and investment advisory services. Further, the company owns trust preferred securities; and sells various life insurance products. It provides its products and services through financial center offices, as well as through a network of automated teller machines, telephone banking, mobile banking, and online banking. Fulton Financial Corporation was founded in 1882 and is headquartered in Lancaster, Pennsylvania.

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.