Reviewing Horizon Bancorp (NASDAQ:HBNC) & M&F Bancorp (OTCMKTS:MFBP)

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

Dividends

M&F Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. Horizon Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 4.0%. Horizon Bancorp pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
M&F Bancorp	N/A	N/A	N/A
Horizon Bancorp	9.86%	8.48%	0.79%

Institutional and Insider Ownership

64.5% of Horizon Bancorp shares are owned by institutional investors. 2.9% of M&F Bancorp shares are owned by company insiders. Comparatively, 2.8% of Horizon Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
M&F Bancorp	0	0	0	0	0.00
Horizon Bancorp	0	2	1	0	2.33

Horizon Bancorp has a consensus target price of $18.67, suggesting a potential upside of 16.89%. Given Horizon Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Horizon Bancorp is more favorable than M&F Bancorp.

Risk & Volatility

M&F Bancorp has a beta of -0.16, indicating that its stock price is 116% less volatile than the S&P 500. Comparatively, Horizon Bancorp has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Valuation & Earnings

This table compares M&F Bancorp and Horizon Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
M&F Bancorp	$29.33 million	1.26	$4.77 million	N/A	N/A
Horizon Bancorp	$187.50 million	3.72	$35.43 million	$0.80	19.96

Horizon Bancorp has higher revenue and earnings than M&F Bancorp.

Summary

Horizon Bancorp beats M&F Bancorp on 12 of the 14 factors compared between the two stocks.

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.

About Horizon Bancorp

Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that engages in the provision of commercial and retail banking services. The company offers checking, saving, money market, certificate of deposits, individual retirement accounts, and time deposits, as well as non-interest- and interest-bearing demand deposits. It also provides commercial, residential real estate, mortgage, home equity, auto, personal, business, agricultural, and SBA loans, as well as credit cards. In addition, the company offers corporate and individual trust and agency, investment management, and real estate investment trust services; debit cards; treasury management; online and mobile banking; wealth, retirement, and estate and trust services; and sells various insurance products. It operates through full-service offices in northern and central Indiana and southern and central Michigan. Horizon Bancorp, Inc. was founded in 1873 and is headquartered in Michigan City, Indiana.