Reviewing Middlefield Banc (NASDAQ:MBCN) and HarborOne Bancorp (NASDAQ:HONE)

HarborOne Bancorp (NASDAQ:HONE) and Middlefield Banc (NASDAQ:MBCN) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.

Profitability

This table compares HarborOne Bancorp and Middlefield Banc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HarborOne Bancorp	8.43%	4.66%	0.47%
Middlefield Banc	18.39%	9.91%	1.12%

Earnings & Valuation

This table compares HarborOne Bancorp and Middlefield Banc”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HarborOne Bancorp	$318.33 million	1.64	$27.41 million	$0.65	18.62
Middlefield Banc	$108.47 million	2.44	$15.52 million	$2.61	12.53

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

Dividends

HarborOne Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 3.0%. Middlefield Banc pays an annual dividend of $0.84 per share and has a dividend yield of 2.6%. HarborOne Bancorp pays out 55.4% of its earnings in the form of a dividend. Middlefield Banc pays out 32.2% 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. HarborOne Bancorp has raised its dividend for 5 consecutive years and Middlefield Banc has raised its dividend for 1 consecutive years. HarborOne Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

HarborOne Bancorp has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Middlefield Banc has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Institutional & Insider Ownership

65.0% of HarborOne Bancorp shares are owned by institutional investors. Comparatively, 31.7% of Middlefield Banc shares are owned by institutional investors. 4.9% of HarborOne Bancorp shares are owned by company insiders. Comparatively, 4.1% of Middlefield Banc shares are owned 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.

Analyst Recommendations

This is a breakdown of recent ratings for HarborOne Bancorp and Middlefield Banc, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HarborOne Bancorp	0	3	0	1	2.50
Middlefield Banc	0	3	1	0	2.25

HarborOne Bancorp currently has a consensus price target of $13.00, suggesting a potential upside of 7.44%. Middlefield Banc has a consensus price target of $30.00, suggesting a potential downside of 8.28%. Given HarborOne Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe HarborOne Bancorp is more favorable than Middlefield Banc.

Summary

HarborOne Bancorp beats Middlefield Banc on 11 of the 18 factors compared between the two stocks.

About HarborOne Bancorp

HarborOne Bancorp, Inc. operates as the holding company for HarborOne Bank that provides financial services to individuals, families, small and mid-size businesses, and municipalities. The company operates in two segments, HarborOne Bank and HarborOne Mortgage. Its primary deposit products include checking, money market, savings, and term certificate of deposit accounts; and primary lending products comprise commercial real estate, commercial, residential mortgages, home equity, and consumer loans. The company also originates, sells, and services residential mortgage loans. In addition, it provides various educational services, such as free digital content, webinars, and recordings for small business and personal financial education under the HarborOne U name. The company operates through a network of full-service branches located in Massachusetts and Rhode Island, as well as commercial lending offices in each of Boston, Massachusetts, and Providence, Rhode Island, as well as administrative offices in Brockton, Massachusetts, as well as ATM locations in Massachusetts. HarborOne Bancorp, Inc. was founded in 1917 and is headquartered in Brockton, Massachusetts.

About Middlefield Banc

Middlefield Banc Corp. operates as the bank holding company for The Middlefield Banking Company that provides various commercial banking services to small and medium-sized businesses, professionals, small business owners, and retail customers in northeastern and central Ohio. It offers checking, savings, negotiable order of withdrawal accounts, money market accounts, time certificates of deposit, commercial loans, real estate loans, various consumer loans, safe deposit facilities, and travelers' checks. The company also provides operational and working capital, term business, residential construction, professional, and residential and mortgage loans, as well as consumer installment loans for home improvements, automobiles, boats, and other personal expenditures; loans to finance capital purchases; selected guaranteed or subsidized loan programs for small businesses; and agricultural loans. In addition, the company resolves and disposes troubled assets in Ohio. Further, it offers official checks, money orders, and ATM services, as well as IRA accounts; online banking and bill payment services to individuals; and online cash management services to business customers. Middlefield Banc Corp. was founded in 1901 and is headquartered in Middlefield, Ohio.