Macatawa Bank (NASDAQ:MCBC) versus VSB Bancorp (NASDAQ:VSBN) Critical Survey

Macatawa Bank (NASDAQ:MCBC) and VSB Bancorp (OTCMKTS:VSBN) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Dividends

Macatawa Bank pays an annual dividend of $0.32 per share and has a dividend yield of 4.4%. VSB Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 3.0%. Macatawa Bank pays out 34.0% of its earnings in the form of a dividend. Macatawa Bank has increased its dividend for 4 consecutive years. Macatawa Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Macatawa Bank has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, VSB Bancorp has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Profitability

This table compares Macatawa Bank and VSB Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Macatawa Bank 12.15% 13.77% 1.40%
VSB Bancorp 19.82% 8.60% 0.88%

Earnings and Valuation

This table compares Macatawa Bank and VSB Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Macatawa Bank $95.67 million 2.57 $31.98 million $0.94 7.66
VSB Bancorp $16.57 million 2.31 $3.41 million N/A N/A

Macatawa Bank has higher revenue and earnings than VSB Bancorp.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Macatawa Bank and VSB Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Macatawa Bank 0 0 0 0 N/A
VSB Bancorp 0 0 0 0 N/A

Institutional & Insider Ownership

33.9% of Macatawa Bank shares are owned by institutional investors. Comparatively, 1.6% of VSB Bancorp shares are owned by institutional investors. 8.3% of Macatawa Bank shares are owned by insiders. Comparatively, 30.0% of VSB Bancorp shares are owned by 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.

Summary

Macatawa Bank beats VSB Bancorp on 8 of the 13 factors compared between the two stocks.

About Macatawa Bank

Macatawa Bank Corporation operates as the bank holding company for Macatawa Bank that provides 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, and multi-family and other non-residential real estate loans; retail loans, such as residential mortgage loans; and 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 trust and brokerage services. It serves individuals, businesses, associations, churches, nonprofit organizations, financial institutions, and government authorities through 26 branch offices, as well as a lending and operation service facility in Kent County, Ottawa County, and northern Allegan County, Michigan. Macatawa Bank Corporation was founded in 1997 and is headquartered in Holland, Michigan.

About VSB Bancorp

VSB Bancorp, Inc. operates as the holding company for Victory State Bank that provides commercial and retail banking products and services primarily in Staten Island, New York. It accepts various deposits from individuals and businesses; grants loans; and invests funds primarily in government securities, mortgage backed securities, and collateralized mortgage obligations, as well as provides Internet banking services. The operates five full service located in Great Kills, Forest Avenue, Hyatt Street, Hylan Boulevard, and Bay Street, Staten Island. VSB Bancorp, Inc. was founded in 1997 and is based in Staten Island, New York.

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