Macro Bank (NYSE: BMA) and Provident Financial Holdings (NASDAQ:PROV) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Dividends

Macro Bank pays an annual dividend of $0.75 per share and has a dividend yield of 0.6%. Provident Financial Holdings pays an annual dividend of $0.56 per share and has a dividend yield of 2.9%. Macro Bank pays out 10.1% of its earnings in the form of a dividend. Provident Financial Holdings pays out 87.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Macro Bank has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500. Comparatively, Provident Financial Holdings has a beta of -0.04, meaning that its stock price is 104% less volatile than the S&P 500.

Profitability

This table compares Macro Bank and Provident Financial Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Macro Bank 17.98% 27.55% 4.53%
Provident Financial Holdings 7.11% 3.96% 0.43%

Valuation and Earnings

This table compares Macro Bank and Provident Financial Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Macro Bank $1.35 billion 6.10 $487.99 million $7.41 16.87
Provident Financial Holdings $67.60 million 2.20 $4.92 million $0.64 30.25

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Macro Bank and Provident Financial Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Macro Bank 1 2 1 0 2.00
Provident Financial Holdings 0 1 0 0 2.00

Macro Bank currently has a consensus target price of $113.70, suggesting a potential downside of 9.04%. Provident Financial Holdings has a consensus target price of $20.00, suggesting a potential upside of 3.31%. Given Provident Financial Holdings’ higher probable upside, analysts plainly believe Provident Financial Holdings is more favorable than Macro Bank.

Insider & Institutional Ownership

28.0% of Macro Bank shares are held by institutional investors. Comparatively, 59.9% of Provident Financial Holdings shares are held by institutional investors. 15.7% of Provident Financial Holdings shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Macro Bank beats Provident Financial Holdings on 10 of the 15 factors compared between the two stocks.

Macro Bank Company Profile

Banco Macro SA is an Argnetina-based financial institution (the Bank) that offers traditional bank products and services to companies, including those operating in regional economies, as well as to individuals. In addition, the Bank performs certain transactions through its subsidiaries, including mainly Banco del Tucuman, Macro Bank Ltd, Macro Securities SA, Macro Fiducia SA and Macro Fondos SGFCI SA. It has approximately two categories of customers, such as retail customers, including individuals and entrepreneurs and corporate customers, which include small, medium and large companies and major corporations. In addition, it provides services to over four provincial governments. It provides its corporate customers with traditional banking products and services, such as deposits, lending (including overdraft facilities), check cashing advances and factoring, guaranteed loans and credit lines for financing foreign trade and cash management services.

Provident Financial Holdings Company Profile

Provident Financial Holdings, Inc. is the holding company of Provident Savings Bank, F.S.B. (the Bank). The Bank is a federally chartered stock savings bank. The Company operates through two segments: Provident Bank and Provident Bank Mortgage (PBM). The Bank’s operations primarily consist of accepting deposits from customers within the communities surrounding the Bank’s full service offices and investing those funds in single-family loans, multi-family loans, commercial real estate loans, construction loans, commercial business loans, consumer loans and other mortgage loans. PBM operations primarily consist of the origination, purchase and sale of mortgage loans secured by single-family residences. The Bank is a financial services company committed to serving consumers and small to mid-sized businesses in the Inland Empire region of Southern California. The Bank offers business checking accounts, other business banking services and services loans for others.

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