Head-To-Head Survey: Magyar Bancorp (NASDAQ:MGYR) & First Mid Bancshares (NASDAQ:FMBH)

Magyar Bancorp (NASDAQ:MGYR) and First Mid Bancshares (NASDAQ:FMBH) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, earnings, institutional ownership, valuation and risk.

Volatility and Risk

Magyar Bancorp has a beta of 0.22, indicating that its stock price is 78% less volatile than the S&P 500. Comparatively, First Mid Bancshares has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.

Profitability

This table compares Magyar Bancorp and First Mid Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magyar Bancorp	18.32%	9.28%	1.09%
First Mid Bancshares	19.95%	10.44%	1.23%

Dividends

Magyar Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.4%. First Mid Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. Magyar Bancorp pays out 22.5% of its earnings in the form of a dividend. First Mid Bancshares pays out 25.2% 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. Magyar Bancorp has increased its dividend for 3 consecutive years and First Mid Bancshares has increased its dividend for 3 consecutive years. Magyar Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

46.3% of Magyar Bancorp shares are owned by institutional investors. Comparatively, 47.6% of First Mid Bancshares shares are owned by institutional investors. 11.1% of Magyar Bancorp shares are owned by insiders. Comparatively, 6.0% of First Mid Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Magyar Bancorp and First Mid Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magyar Bancorp	$58.42 million	1.88	$9.76 million	$1.78	9.56
First Mid Bancshares	$466.04 million	2.46	$91.75 million	$3.97	10.86

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

Analyst Ratings

This is a summary of recent ratings and price targets for Magyar Bancorp and First Mid Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magyar Bancorp	0	1	0	0	2.00
First Mid Bancshares	0	3	3	0	2.50

First Mid Bancshares has a consensus target price of $49.50, suggesting a potential upside of 14.77%. Given First Mid Bancshares’ stronger consensus rating and higher possible upside, analysts plainly believe First Mid Bancshares is more favorable than Magyar Bancorp.

Summary

First Mid Bancshares beats Magyar Bancorp on 13 of the 16 factors compared between the two stocks.

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.

About First Mid Bancshares

First Mid Bancshares, Inc., a financial holding company, provides community banking products and services to commercial, retail, and agricultural customers in the United States. It accepts various deposit products, such as demand deposits, savings accounts, money market deposits, and time deposits. The company’s loan products include commercial real estate, commercial and industrial, agricultural and agricultural real estate, residential real estate, and consumer loans, as well as construction and land development, 1-4 family residential properties, and multifamily residential properties loans; and other loans comprising loans to municipalities to support community projects, such as infrastructure improvements or equipment purchases. It also offers wealth management services, which include estate planning, investment, and farm management and brokerage services for individuals; employee benefit services for businesses; and farm management and brokerage services. In addition, the company provides property and casualty, senior insurance products, and group medical insurance for businesses; and personal lines insurance to individuals. The company was formerly known as First Mid-Illinois Bancshares, Inc. and changed its name to First Mid Bancshares, Inc. in April 2019. First Mid Bancshares, Inc. was founded in 1865 and is headquartered in Mattoon, Illinois.