Head to Head Analysis: Middlefield Banc (NASDAQ:MBCN) and NB Bancorp (NASDAQ:NBBK)

NB Bancorp (NASDAQ:NBBK) and Middlefield Banc (NASDAQ:MBCN) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, earnings, risk, dividends, analyst recommendations, institutional ownership and valuation.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for NB Bancorp and Middlefield Banc, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NB Bancorp	0	3	1	0	2.25
Middlefield Banc	1	2	1	0	2.00

NB Bancorp presently has a consensus target price of $23.00, suggesting a potential upside of 12.36%. Middlefield Banc has a consensus target price of $30.00, suggesting a potential downside of 16.15%. Given NB Bancorp’s stronger consensus rating and higher possible upside, research analysts plainly believe NB Bancorp is more favorable than Middlefield Banc.

Earnings & Valuation

This table compares NB Bancorp and Middlefield Banc”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NB Bancorp	$304.05 million	2.68	$42.15 million	$1.55	13.21
Middlefield Banc	$108.47 million	2.67	$15.52 million	$2.61	13.71

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

Insider and Institutional Ownership

31.7% of Middlefield Banc shares are owned by institutional investors. 1.9% of NB Bancorp shares are owned by company insiders. Comparatively, 4.1% of Middlefield Banc shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

NB Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. Middlefield Banc pays an annual dividend of $0.84 per share and has a dividend yield of 2.3%. NB Bancorp pays out 18.1% of its earnings in the form of a dividend. Middlefield Banc pays out 32.2% 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. Middlefield Banc has increased its dividend for 1 consecutive years. Middlefield Banc is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

NB Bancorp has a beta of 0.32, suggesting that its stock price is 68% less volatile than the S&P 500. Comparatively, Middlefield Banc has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.

Profitability

This table compares NB Bancorp and Middlefield Banc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NB Bancorp	17.59%	7.79%	1.10%
Middlefield Banc	18.39%	9.79%	1.11%

Summary

Middlefield Banc beats NB Bancorp on 10 of the 16 factors compared between the two stocks.

About NB Bancorp

NB Bancorp, Inc. focuses on operating as a bank holding company for Needham Bank that provides various banking products and services in Greater Boston metropolitan area and surrounding communities in Massachusetts, eastern Connecticut, southern New Hampshire, and Rhode Island. The company offers various deposits, including certificate of deposit, individual retirement, money market, savings, NOW, demand deposit, and interest-bearing and noninterest-bearing checking accounts; and commercial real estate and multifamily, one- to four-family residential real estate, construction and land development, commercial and industrial, and consumer loans, as well as home equity loans and lines of credit. It also invests in securities consisting of U.S. treasury and federal agency securities, government-sponsored residential mortgage-backed securities, municipal bonds, and corporate bonds. The company was founded in 1892 and is based in Needham, Massachusetts.

About Middlefield Banc

Middlefield Banc Corp. operates as the bank holding company for The Middlefield Banking Company that provides various commercial banking services to small and medium-sized businesses, professionals, small business owners, and retail customers in northeastern and central Ohio. It offers checking, savings, negotiable order of withdrawal accounts, money market accounts, time certificates of deposit, commercial loans, real estate loans, various consumer loans, safe deposit facilities, and travelers' checks. The company also provides operational and working capital, term business, residential construction, professional, and residential and mortgage loans, as well as consumer installment loans for home improvements, automobiles, boats, and other personal expenditures; loans to finance capital purchases; selected guaranteed or subsidized loan programs for small businesses; and agricultural loans. In addition, the company resolves and disposes troubled assets in Ohio. Further, it offers official checks, money orders, and ATM services, as well as IRA accounts; online banking and bill payment services to individuals; and online cash management services to business customers. Middlefield Banc Corp. was founded in 1901 and is headquartered in Middlefield, Ohio.