Mackinac Financial (NASDAQ: MFNC) and Anchor Bancorp (NASDAQ:ANCB) are both small-cap financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, earnings, dividends, risk and valuation.

Risk & Volatility

Mackinac Financial has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Anchor Bancorp has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Profitability

This table compares Mackinac Financial and Anchor Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mackinac Financial 15.17% 9.06% 0.73%
Anchor Bancorp 11.28% 4.31% 0.62%

Valuation and Earnings

This table compares Mackinac Financial and Anchor Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mackinac Financial $42.14 million 2.39 $4.48 million $1.14 14.04
Anchor Bancorp $24.54 million 2.53 $2.35 million $1.16 21.47

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

Analyst Recommendations

This is a breakdown of recent ratings for Mackinac Financial and Anchor Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mackinac Financial 0 0 0 0 N/A
Anchor Bancorp 0 0 0 0 N/A

Dividends

Mackinac Financial pays an annual dividend of $0.48 per share and has a dividend yield of 3.0%. Anchor Bancorp does not pay a dividend. Mackinac Financial pays out 42.1% of its earnings in the form of a dividend.

Insider & Institutional Ownership

28.4% of Mackinac Financial shares are held by institutional investors. Comparatively, 45.6% of Anchor Bancorp shares are held by institutional investors. 24.2% of Mackinac Financial shares are held by insiders. Comparatively, 5.6% of Anchor Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Mackinac Financial beats Anchor Bancorp on 7 of the 13 factors compared between the two stocks.

Mackinac Financial Company Profile

Mackinac Financial Corporation is a bank holding Company of mBank (the Bank). The Company, through the Bank, is engaged in the general commercial banking business. The Bank provides a range of loan and deposit products. These banking services include customary retail and commercial banking services, including checking and savings accounts, time deposits, interest bearing transaction accounts, safe deposit facilities, real estate mortgage lending, commercial lending, commercial and governmental lease financing, and direct and indirect consumer financing. The funds for the Bank’s operation are also provided by brokered deposits and through borrowings from the Federal Home Loan Bank (FHLB) system, proceeds from the sale of loans and mortgage-backed and other securities, funds from repayment of outstanding loans and earnings from operations. The Bank has over 13 branch offices located in the Upper Peninsula of Michigan and four branch offices located in Michigan’s Lower Peninsula.

Anchor Bancorp Company Profile

Anchor Bancorp is the bank holding company of Anchor Bank (the Bank). The Bank is a community-based savings bank. As of June 30, 2016, the Bank primarily served Western Washington through its 10 full-service banking offices (including a Wal-Mart in-store location) located within Grays Harbor, Thurston, Lewis, Pierce and Mason counties, and a loan production office located in King County, Washington. It is in the business of attracting deposits from the public and utilizing those deposits to originate loans. The Bank offers a range of loan products. The Bank’s operations include commercial banking services, such as lending activities, deposit products and other cash management services. The Bank offers commercial real estate loans and multi-family loans primarily in Western Washington. The Bank offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts and certificates of deposit with a range of rates.

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