Heartland Financial USA (NASDAQ:HTLF – Get Free Report) and Macatawa Bank (NASDAQ:MCBC – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.
Profitability
This table compares Heartland Financial USA and Macatawa Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Heartland Financial USA | 8.17% | 11.33% | 1.03% |
| Macatawa Bank | 30.56% | 14.73% | 1.53% |
Valuation & Earnings
This table compares Heartland Financial USA and Macatawa Bank’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Heartland Financial USA | $932.87 million | 1.95 | $79.92 million | $1.66 | 25.63 |
| Macatawa Bank | $132.25 million | 3.50 | $43.22 million | $1.20 | 11.23 |
Institutional & Insider Ownership
71.6% of Heartland Financial USA shares are owned by institutional investors. Comparatively, 42.5% of Macatawa Bank shares are owned by institutional investors. 1.8% of Heartland Financial USA shares are owned by company insiders. Comparatively, 8.6% of Macatawa Bank shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of current recommendations for Heartland Financial USA and Macatawa Bank, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Heartland Financial USA | 0 | 1 | 3 | 1 | 3.00 |
| Macatawa Bank | 0 | 0 | 3 | 0 | 3.00 |
Heartland Financial USA currently has a consensus target price of $45.60, indicating a potential upside of 7.19%. Macatawa Bank has a consensus target price of $12.83, indicating a potential downside of 4.73%. Given Heartland Financial USA’s higher possible upside, equities analysts clearly believe Heartland Financial USA is more favorable than Macatawa Bank.
Risk and Volatility
Heartland Financial USA has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, Macatawa Bank has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.
Dividends
Heartland Financial USA pays an annual dividend of $1.20 per share and has a dividend yield of 2.8%. Macatawa Bank pays an annual dividend of $0.36 per share and has a dividend yield of 2.7%. Heartland Financial USA pays out 72.3% of its earnings in the form of a dividend. Macatawa Bank pays out 30.0% 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.
Summary
Heartland Financial USA beats Macatawa Bank on 9 of the 15 factors compared between the two stocks.
About Heartland Financial USA
Heartland Financial USA, Inc., a bank holding company, provides commercial, small business, and consumer banking services to individuals and businesses in the United States. The company accepts various deposit products, including checking, demand deposit accounts, NOW accounts, savings, money market, and individual retirement; certificates of deposit; and other time deposits. It offers loans, including commercial and industrial, commercial real estate, agricultural, small business, and real estate mortgage loans; consumer loans comprising motor vehicle, home improvement, home equity line of credit, and fixed rate home equity and personal lines of credit; and credit cards for commercial, business, and personal use. In addition, the company provides business and personal online banking, and mobile banking; bill payment, remote deposit capture, and treasury management services; debit cards; automated teller machines; and automated clearing house services, wire transfers, insured cash sweeps, zero balance accounts, lockbox, image cash letter, remote deposit capture, commercial cards for travel and entertainment purchasing, merchant services to receive credit card payments, investment sweep accounts, reconciliation services, online invoice processing, foreign exchange and positive pay fraud prevention services for checks and automated clearing house services payments. Further, it offers wealth management, trust services, brokerage services, and fixed rate annuity products; and investment services, including mutual funds, individual retirement products, and education savings products. Heartland Financial USA, Inc. was founded in 1981 and is headquartered in Denver, Colorado.
About Macatawa Bank
Macatawa Bank Corporation operates as the bank holding company for Macatawa Bank that engages in the provision of commercial and consumer banking and trust services. The company accepts various deposits, such as checking accounts, savings accounts, time deposits, regular and money market savings accounts, certificates of deposit, and demand deposits. Its loan products include commercial and industrial loans comprising loans to finance operations and equipment; commercial real estate loans, which consist of construction and development, multi-family, and other non-residential real estate loans; and residential mortgage loans, as well as consumer loans, including automobile loans, home equity lines of credit and installment loans, home improvement loans, deposit account loans, and other loans for household and personal purposes. The company also offers ATM and debit card processing, cash management, and brokerage services. In addition, it provides asset management, personal trust, and retirement plan services. It serves individuals, businesses, associations, churches, nonprofit organizations, financial institutions, and government authorities. The company was incorporated in 1997 and is based in Holland, Michigan.
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