Analyzing Magyar Bancorp (NASDAQ:MGYR) & California BanCorp (NASDAQ:BCAL)

California BanCorp (NASDAQ:BCAL) and Magyar Bancorp (NASDAQ:MGYR) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Volatility & Risk

California BanCorp has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Magyar Bancorp has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for California BanCorp and Magyar Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
California BanCorp	0	1	5	0	2.83
Magyar Bancorp	0	1	0	0	2.00

California BanCorp currently has a consensus target price of $24.50, indicating a potential upside of 11.79%. Given California BanCorp’s stronger consensus rating and higher probable upside, research analysts clearly believe California BanCorp is more favorable than Magyar Bancorp.

Dividends

California BanCorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.2%. Magyar Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. California BanCorp pays out 26.8% of its earnings in the form of a dividend. Magyar Bancorp pays out 20.1% 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.

Earnings & Valuation

This table compares California BanCorp and Magyar Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
California BanCorp	$237.07 million	2.94	$63.06 million	$1.79	12.24
Magyar Bancorp	$63.60 million	2.21	$12.56 million	$1.99	10.91

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

Institutional & Insider Ownership

55.4% of California BanCorp shares are owned by institutional investors. Comparatively, 46.3% of Magyar Bancorp shares are owned by institutional investors. 8.1% of California BanCorp shares are owned by insiders. Comparatively, 11.1% of Magyar Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares California BanCorp and Magyar Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
California BanCorp	25.47%	10.08%	1.44%
Magyar Bancorp	19.74%	10.11%	1.19%

Summary

California BanCorp beats Magyar Bancorp on 12 of the 17 factors compared between the two stocks.

About California BanCorp

California BanCorp is a bank holding company and the parent of California Bank of Commerce. Through its banking subsidiary, it provides commercial banking services to businesses, professionals and individuals in California. The bank offers business deposit accounts, commercial lending and services that help clients manage payments and cash flow. Its lending includes financing for business operations and commercial real estate, alongside other banking products for local and regional customers. California Bank of Commerce was established to serve businesses in California and has expanded its presence across the state.

About Magyar Bancorp

Magyar Bancorp, Inc. is the holding company for Magyar Bank, a community bank headquartered in New Brunswick, New Jersey. Through its banking subsidiary, the company provides deposit, lending and other financial services to individuals, families and businesses. Magyar Bank’s products and services include checking and savings accounts, certificates of deposit, residential mortgages, home equity loans and lines of credit, consumer loans, commercial real estate financing and business loans. The bank also offers electronic banking services, including online and mobile banking, along with related payment and account-management tools.