Reviewing Mechanics Bancorp (MCHB) & The Competition

Mechanics Bancorp (NASDAQ:MCHB) is one of 20 publicly-traded companies in the “State Commercial Banks – Fed Reserve System” industry, but how does it compare to its peers? We will compare Mechanics Bancorp to related companies based on the strength of its institutional ownership, profitability, risk, valuation, analyst recommendations, earnings and dividends.

Risk & Volatility

Mechanics Bancorp has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500. Comparatively, Mechanics Bancorp’s peers have a beta of 1.01, indicating that their average stock price is 1% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Mechanics Bancorp and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mechanics Bancorp	0	2	0	0	2.00
Mechanics Bancorp Competitors	29	165	196	18	2.50

Mechanics Bancorp presently has a consensus target price of $14.50, indicating a potential downside of 2.09%. As a group, “State Commercial Banks – Fed Reserve System” companies have a potential upside of 6.63%. Given Mechanics Bancorp’s peers stronger consensus rating and higher possible upside, analysts plainly believe Mechanics Bancorp has less favorable growth aspects than its peers.

Valuation and Earnings

This table compares Mechanics Bancorp and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Mechanics Bancorp	$594.41 million	-$144.34 million	-2.19
Mechanics Bancorp Competitors	$749.76 million	$95.99 million	38.77

Mechanics Bancorp’s peers have higher revenue and earnings than Mechanics Bancorp. Mechanics Bancorp is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Insider & Institutional Ownership

74.7% of Mechanics Bancorp shares are held by institutional investors. Comparatively, 72.2% of shares of all “State Commercial Banks – Fed Reserve System” companies are held by institutional investors. 4.6% of Mechanics Bancorp shares are held by insiders. Comparatively, 6.7% of shares of all “State Commercial Banks – Fed Reserve System” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Mechanics Bancorp and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mechanics Bancorp	-14.49%	4.74%	0.41%
Mechanics Bancorp Competitors	7.23%	6.94%	0.79%

Dividends

Mechanics Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 5.7%. Mechanics Bancorp pays out -12.4% of its earnings in the form of a dividend. As a group, “State Commercial Banks – Fed Reserve System” companies pay a dividend yield of 2.3% and pay out 67.3% of their earnings in the form of a dividend. Mechanics Bancorp is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Summary

Mechanics Bancorp peers beat Mechanics Bancorp on 11 of the 15 factors compared.

About Mechanics Bancorp

HomeStreet, Inc. operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services primarily in the Western United States. The company offers personal and business checking, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit; credit cards; insurance; and treasury management products and services. Its loan products include commercial business and agriculture loans, single family residential mortgages, consumer loans, commercial loans secured by residential and commercial real estate, and construction loans for residential and commercial real estate development, as well as consumer installment loans and permanent loans on commercial real estate and single-family residences. In addition, the company offers its products and services through bank branches, loan production offices, and ATMs, as well as through online, mobile, and telephone banking. As of December 31, 2021, it operated 60 full-service bank branches located in Washington state, Northern and Southern California, the Portland, Oregon, and Hawaii; and five primary stand-alone commercial lending centers in Central Washington, Oregon, Southern California, Idaho, and Utah. HomeStreet, Inc. serves small and medium sized businesses, real estate investors, professional firms, and individuals. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was incorporated in 1921 and is headquartered in Seattle, Washington.