Critical Comparison: Malaga Financial (OTCMKTS:MLGF) vs. TriCo Bancshares (NASDAQ:TCBK)

TriCo Bancshares (NASDAQ:TCBK) and Malaga Financial (OTCMKTS:MLGF) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Risk and Volatility

TriCo Bancshares has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500. Comparatively, Malaga Financial has a beta of 0.08, suggesting that its share price is 92% less volatile than the S&P 500.

Profitability

This table compares TriCo Bancshares and Malaga Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TriCo Bancshares	22.56%	9.53%	1.23%
Malaga Financial	N/A	N/A	N/A

Earnings & Valuation

This table compares TriCo Bancshares and Malaga Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TriCo Bancshares	$538.91 million	3.00	$121.56 million	$3.71	13.39
Malaga Financial	N/A	N/A	$21.55 million	$2.18	10.09

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

Institutional and Insider Ownership

59.1% of TriCo Bancshares shares are owned by institutional investors. Comparatively, 1.2% of Malaga Financial shares are owned by institutional investors. 4.8% of TriCo Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

TriCo Bancshares pays an annual dividend of $1.44 per share and has a dividend yield of 2.9%. Malaga Financial pays an annual dividend of $1.00 per share and has a dividend yield of 4.5%. TriCo Bancshares pays out 38.8% of its earnings in the form of a dividend. Malaga Financial pays out 45.9% 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. TriCo Bancshares has raised its dividend for 12 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and price targets for TriCo Bancshares and Malaga Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TriCo Bancshares	0	4	3	0	2.43
Malaga Financial	0	0	0	0	0.00

TriCo Bancshares presently has a consensus price target of $53.80, suggesting a potential upside of 8.31%. Given TriCo Bancshares’ stronger consensus rating and higher probable upside, equities analysts plainly believe TriCo Bancshares is more favorable than Malaga Financial.

Summary

TriCo Bancshares beats Malaga Financial on 15 of the 16 factors compared between the two stocks.

About TriCo Bancshares

TriCo Bancshares operates as a bank holding company for Tri Counties Bank that provides commercial banking services to individual and corporate customers. The company accepts demand, savings, and time deposits. It also provides small business loans; real estate mortgage loans, such as residential and commercial loans; consumer loans; mortgage, auto, other vehicle, and personal loans; commercial loans, including agricultural loans; and real estate construction loans. In addition, the company offers treasury management services; credit and debit cards; and other customary banking services, including safe deposit boxes; and independent financial and broker-dealer services. Further, it provides checking, saving, and money market accounts, as well as individual retirement accounts; equipment financing; certificate of deposit account registry service; certificated of deposit; and IntraFi cash service. TriCo Bancshares was founded in 1975 and is headquartered in Chico, California.

About Malaga Financial

Malaga Financial Corporation operates as the holding company for Malaga Bank that provides various community banking products and services to personal and business customers. It offers checking, savings, NOW, and money market accounts, certificates of deposits, business banking, consumer, and demand deposits. The company also provides commercial real estate, single and multi-family residential mortgage, consumer, 14-unit investment property, construction, personal, and business loans; home equity lines of credit; and certificates of deposit. In addition, it offers coupon redemption, direct deposit, overdraft lines of credit, telephone transfers, U.S. savings bond redemption, and wire transfer services; and ATM and VISA debit cards, bank by mail, medallion signature guarantee, night depository, notary, safe deposit boxes, and trust deed note collection services. Further, the company provides online banking services, including bill payer, e-statements, and mobile banking services. The company was incorporated in 2002 and is headquartered in Palos Verdes Estates, California.