Head to Head Comparison: Horizon Bancorp (NASDAQ:HBNC) and M&F Bancorp (OTCMKTS:MFBP)

Horizon Bancorp (NASDAQ:HBNC) and M&F Bancorp (OTCMKTS:MFBP) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, valuation, risk, earnings and institutional ownership.

Profitability

This table compares Horizon Bancorp and M&F Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Horizon Bancorp	9.86%	8.48%	0.79%
M&F Bancorp	N/A	N/A	N/A

Volatility & Risk

Horizon Bancorp has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, M&F Bancorp has a beta of -0.16, indicating that its share price is 116% less volatile than the S&P 500.

Insider & Institutional Ownership

64.5% of Horizon Bancorp shares are owned by institutional investors. 2.8% of Horizon Bancorp shares are owned by insiders. Comparatively, 2.9% of M&F Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Horizon Bancorp and M&F Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Horizon Bancorp	0	2	1	0	2.33
M&F Bancorp	0	0	0	0	0.00

Horizon Bancorp currently has a consensus target price of $18.67, suggesting a potential upside of 19.43%. Given Horizon Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Horizon Bancorp is more favorable than M&F Bancorp.

Earnings & Valuation

This table compares Horizon Bancorp and M&F Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Horizon Bancorp	$187.50 million	3.64	$35.43 million	$0.80	19.54
M&F Bancorp	$29.33 million	1.21	$4.77 million	N/A	N/A

Horizon Bancorp has higher revenue and earnings than M&F Bancorp.

Dividends

Horizon Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 4.1%. M&F Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. Horizon Bancorp pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Horizon Bancorp beats M&F Bancorp on 12 of the 14 factors compared between the two stocks.

About Horizon Bancorp

Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that engages in the provision of commercial and retail banking services. The company offers checking, saving, money market, certificate of deposits, individual retirement accounts, and time deposits, as well as non-interest- and interest-bearing demand deposits. It also provides commercial, residential real estate, mortgage, home equity, auto, personal, business, agricultural, and SBA loans, as well as credit cards. In addition, the company offers corporate and individual trust and agency, investment management, and real estate investment trust services; debit cards; treasury management; online and mobile banking; wealth, retirement, and estate and trust services; and sells various insurance products. It operates through full-service offices in northern and central Indiana and southern and central Michigan. Horizon Bancorp, Inc. was founded in 1873 and is headquartered in Michigan City, Indiana.

About M&F Bancorp

M&F Bancorp, Inc. operates as a bank holding company for the Mechanics and Farmers Bank that provides consumer and commercial banking products and services in North Carolina. It offers deposit products, including demand deposits; checking, savings, and money market accounts, as well as certificates of deposit. The company provides loans for commercial and residential real estate, and construction; and consumer and other loans; as well as ATM services. M&F Bancorp, Inc. was founded in 1907 and is headquartered in Durham, North Carolina.