Financial Survey: M&F Bancorp (OTCMKTS:MFBP) vs. USCB Financial (NASDAQ:USCB)

USCB Financial (NASDAQ:USCB) and M&F Bancorp (OTCMKTS:MFBP) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Dividends

USCB Financial pays an annual dividend of $0.50 per share and has a dividend yield of 2.4%. M&F Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. USCB Financial pays out 35.0% of its earnings in the form of a dividend. M&F Bancorp pays out 18.5% 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. USCB Financial has increased its dividend for 2 consecutive years. USCB Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

61.3% of USCB Financial shares are held by institutional investors. 49.5% of USCB Financial shares are held by insiders. Comparatively, 2.9% of M&F Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares USCB Financial and M&F Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
USCB Financial	$159.60 million	2.34	$26.10 million	$1.43	14.32
M&F Bancorp	$29.72 million	1.90	$4.30 million	$1.30	22.34

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for USCB Financial and M&F Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
USCB Financial	0	2	2	1	2.80
M&F Bancorp	0	0	0	0	0.00

USCB Financial currently has a consensus target price of $22.00, indicating a potential upside of 7.42%. Given USCB Financial’s stronger consensus rating and higher probable upside, research analysts plainly believe USCB Financial is more favorable than M&F Bancorp.

Profitability

This table compares USCB Financial and M&F Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
USCB Financial	17.04%	15.37%	1.22%
M&F Bancorp	N/A	N/A	N/A

Volatility and Risk

USCB Financial has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500. Comparatively, M&F Bancorp has a beta of -0.54, suggesting that its share price is 154% less volatile than the S&P 500.

Summary

USCB Financial beats M&F Bancorp on 16 of the 18 factors compared between the two stocks.

About USCB Financial

USCB Financial Holdings, Inc. operates as the bank holding company for U.S. Century Bank that engages in the provision of various personal and business banking products and services in the United States. It accepts various deposit products, including commercial and consumer checking, money market deposit, savings, and time deposit accounts, as well as certificates of deposit. It also offers loan products, such as small business administration loans, yacht financing, residential and commercial real estate loans; commercial and industrial loans; foreign bank loans; and secured and unsecured consumer loans comprising personal loans, overdrafts, and deposit account collateralized loans. The company also offers lockbox, treasury, commercial payments, cash management, and online banking services, as well as provides title insurance policies for real estate transactions. USCB Financial Holdings, Inc. was founded in 2002 and is headquartered in Miami, Florida.

About M&F Bancorp

M&F Bancorp, Inc. operates as a bank holding company for the Mechanics and Farmers Bank that provides consumer and commercial banking products and services in North Carolina. It offers deposit products, including demand deposits; checking, savings, and money market accounts, as well as certificates of deposit. The company provides loans for commercial and residential real estate, and construction; and consumer and other loans; as well as ATM services. M&F Bancorp, Inc. was founded in 1907 and is headquartered in Durham, North Carolina.