Critical Contrast: MBT Financial (MBTF) & PacWest Bancorp (PACW)

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

Dividends

MBT Financial pays an annual dividend of $0.40 per share and has a dividend yield of 3.7%. PacWest Bancorp pays an annual dividend of $2.40 per share and has a dividend yield of 4.7%. PacWest Bancorp pays out 82.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PacWest Bancorp has raised its dividend for 7 consecutive years. PacWest Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
MBT Financial 21.20% 14.14% 1.36%
PacWest Bancorp 33.41% 8.70% 1.74%

Institutional and Insider Ownership

49.7% of MBT Financial shares are owned by institutional investors. Comparatively, 86.1% of PacWest Bancorp shares are owned by institutional investors. 22.9% of MBT Financial shares are owned by company insiders. Comparatively, 1.0% of PacWest Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for MBT Financial and PacWest Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MBT Financial 0 2 0 0 2.00
PacWest Bancorp 0 5 5 2 2.75

MBT Financial presently has a consensus target price of $12.00, suggesting a potential upside of 9.59%. PacWest Bancorp has a consensus target price of $55.80, suggesting a potential upside of 9.50%. Given MBT Financial’s higher possible upside, analysts plainly believe MBT Financial is more favorable than PacWest Bancorp.

Risk & Volatility

MBT Financial has a beta of -0.36, indicating that its stock price is 136% less volatile than the S&P 500. Comparatively, PacWest Bancorp has a beta of 1.42, indicating that its stock price is 42% more volatile than the S&P 500.

Earnings & Valuation

This table compares MBT Financial and PacWest Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MBT Financial $57.68 million 4.36 $10.60 million N/A N/A
PacWest Bancorp $1.18 billion 5.28 $357.81 million $2.92 17.45

PacWest Bancorp has higher revenue and earnings than MBT Financial.

Summary

PacWest Bancorp beats MBT Financial on 13 of the 17 factors compared between the two stocks.

About MBT Financial

MBT Financial Corp. operates as the bank holding company for the Monroe Bank & Trust that provides retail and commercial banking, and trust services to small and middle-market businesses and middle-income individuals. It offers checking and savings accounts, time deposits, and IRAs; and commercial loans, personal loans, real estate mortgage loans, and installment loans. The company also provides safe deposit facilities, ATM and night depository facilities, treasury management services, telephone and Internet banking, personal trust, employee benefit, and investment management services. It operates through a network of 20 full service branches in Monroe and Wayne counties, Michigan; and provides wealth management services. The company was founded in 1858 and is headquartered in Monroe, Michigan.

About PacWest Bancorp

PacWest Bancorp operates as the holding company for Pacific Western Bank, a state chartered bank that provides commercial banking products and services. The company accepts demand, money market, and time deposits. It also provides real estate loans to professional developers and real estate investors for the acquisition, refinancing, and construction of commercial real estate properties; small business administration loans; asset-based loans for working capital needs; venture capital loans to support the start-up operations of entrepreneurial companies; and equipment-secured loans and leases. In addition, the company offers consumer loans comprising personal loans, auto loans, home equity lines of credit, revolving lines of credit, and other loans. Further, it provides international banking and multi-state deposit services; money market sweep products; investment advisory and asset management services; treasury and cash management services; telephone banking, and online and mobile banking services; and foreign exchange and ATM services. The company offers its products and services to small and mid-sized companies, entrepreneurial businesses and their venture capital, private equity investors, professionals, and other individuals. As of February 1, 2018, it had 76 full-service branches located throughout the state of California; and one branch in Durham, North Carolina. The company was formerly known as First Community Bancorp and changed its name to PacWest Bancorp in April 2008. PacWest Bancorp was founded in 1999 and is headquartered in Beverly Hills, California.

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