Analyzing Associated Banc (ASB) and Macatawa Bank (MCBC)

Associated Banc (NYSE:ASB) and Macatawa Bank (NASDAQ:MCBC) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, valuation, profitability, analyst recommendations, earnings and dividends.

Risk & Volatility

Get Associated Banc alerts:

Associated Banc has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, Macatawa Bank has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500.

Dividends

Associated Banc pays an annual dividend of $0.68 per share and has a dividend yield of 3.0%. Macatawa Bank pays an annual dividend of $0.28 per share and has a dividend yield of 2.7%. Associated Banc pays out 33.5% of its earnings in the form of a dividend. Macatawa Bank pays out 35.9% 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. Associated Banc has raised its dividend for 3 consecutive years and Macatawa Bank has raised its dividend for 3 consecutive years. Associated Banc is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Associated Banc and Macatawa Bank’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Associated Banc	$1.51 billion	2.46	$333.56 million	$2.03	11.12
Macatawa Bank	$86.54 million	4.11	$26.37 million	$0.78	13.38

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

Insider & Institutional Ownership

74.9% of Associated Banc shares are held by institutional investors. Comparatively, 30.9% of Macatawa Bank shares are held by institutional investors. 2.1% of Associated Banc shares are held by insiders. Comparatively, 8.6% of Macatawa Bank shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Associated Banc and Macatawa Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Associated Banc	2	6	2	0	2.00
Macatawa Bank	0	2	0	1	2.67

Associated Banc currently has a consensus target price of $25.00, indicating a potential upside of 10.77%. Macatawa Bank has a consensus target price of $20.67, indicating a potential upside of 97.96%. Given Macatawa Bank’s stronger consensus rating and higher probable upside, analysts clearly believe Macatawa Bank is more favorable than Associated Banc.

Profitability

This table compares Associated Banc and Macatawa Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Associated Banc	22.09%	9.79%	1.04%
Macatawa Bank	30.48%	14.46%	1.38%

Summary

Macatawa Bank beats Associated Banc on 9 of the 17 factors compared between the two stocks.

Associated Banc Company Profile

Associated Banc-Corp, a bank holding company, provides various banking and nonbanking products to individuals and businesses primarily in Wisconsin, Illinois, and Minnesota. Its Corporate and Commercial Specialty segment offers deposit and cash management solutions, such as commercial checking and interest-bearing deposit products, cash vault and night depository services, liquidity solutions, payables and receivables solutions, and information services; and lending solutions, including commercial loans and lines of credit, commercial real estate financing, construction loans, letters of credit, leasing, asset based lending, and loan syndications. This segment also provides specialized financial services that comprise interest rate risk management, foreign exchange solutions, and commodity hedging. The company's Community, Consumer, and Business segment offers checking, credit, debit and pre-paid cards, online banking and bill pay, and money transfer services; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; savings, money market deposit accounts, IRA accounts, certificates of deposit, and fixed and variable annuities, as well as full-service, discount, and online investment brokerage; investment advisory services; trust and investment management accounts; and insurance and other related products and services. This segment also engages in the administration of pension, profit-sharing and other employee benefit plans, fiduciary and corporate agency services, and institutional asset management services. Its Risk Management and Shared Services segment provides corporate risk management, credit administration, finance, treasury, operations, and technology services. As of March 16, 2018, the company operated 270 banking locations serving approximately 110 communities. Associated Banc-Corp was founded in 1861 and is headquartered in Green Bay, Wisconsin.

Macatawa Bank Company Profile

Macatawa Bank Corporation operates as the bank holding company for Macatawa Bank that provides commercial and consumer banking and trust services. The company accepts various deposits, such as checking accounts, savings accounts, time deposits, regular and money market savings accounts, certificates of deposit, and demand deposits. Its loan products include commercial and industrial loans comprising loans to finance operations and equipment; commercial real estate loans, which consist of construction and development, and multi-family and other non-residential real estate loans; retail loans, such as residential mortgage loans; and consumer loans, including automobile loans, home equity lines of credit and installment loans, home improvement loans, deposit account loans, and other loans for household and personal purposes. The company also offers ATM and debit card processing, cash management, and trust and brokerage services. It serves individuals, businesses, associations, churches, nonprofit organizations, financial institutions, and government authorities through 26 branch offices, as well as a lending and operation service facility in Kent County, Ottawa County, and northern Allegan County, Michigan. Macatawa Bank Corporation was founded in 1997 and is headquartered in Holland, Michigan.