Head to Head Review: HarborOne Bancorp (NASDAQ:HONE) and Middlefield Banc (NASDAQ:MBCN)

Middlefield Banc (NASDAQ:MBCN) and HarborOne Bancorp (NASDAQ:HONE) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Middlefield Banc	$108.47 million	2.43	$15.52 million	$2.61	12.49
HarborOne Bancorp	$318.33 million	1.64	$27.41 million	$0.65	18.62

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

Analyst Recommendations

This is a breakdown of recent recommendations for Middlefield Banc and HarborOne Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Middlefield Banc	0	3	1	0	2.25
HarborOne Bancorp	0	3	0	1	2.50

Middlefield Banc currently has a consensus price target of $30.00, suggesting a potential downside of 7.98%. HarborOne Bancorp has a consensus price target of $13.00, suggesting a potential upside of 7.44%. Given HarborOne Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe HarborOne Bancorp is more favorable than Middlefield Banc.

Volatility and Risk

Middlefield Banc has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500. Comparatively, HarborOne Bancorp has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Institutional and Insider Ownership

31.7% of Middlefield Banc shares are held by institutional investors. Comparatively, 65.0% of HarborOne Bancorp shares are held by institutional investors. 4.1% of Middlefield Banc shares are held by company insiders. Comparatively, 4.9% of HarborOne Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Middlefield Banc	18.39%	9.91%	1.12%
HarborOne Bancorp	8.43%	4.66%	0.47%

Dividends

Middlefield Banc pays an annual dividend of $0.84 per share and has a dividend yield of 2.6%. HarborOne Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 3.0%. Middlefield Banc pays out 32.2% of its earnings in the form of a dividend. HarborOne Bancorp pays out 55.4% 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 and HarborOne Bancorp has increased its dividend for 5 consecutive years. HarborOne Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

HarborOne Bancorp beats Middlefield Banc on 11 of the 18 factors compared between the two stocks.

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.

About HarborOne Bancorp

HarborOne Bancorp, Inc. operates as the holding company for HarborOne Bank that provides financial services to individuals, families, small and mid-size businesses, and municipalities. The company operates in two segments, HarborOne Bank and HarborOne Mortgage. Its primary deposit products include checking, money market, savings, and term certificate of deposit accounts; and primary lending products comprise commercial real estate, commercial, residential mortgages, home equity, and consumer loans. The company also originates, sells, and services residential mortgage loans. In addition, it provides various educational services, such as free digital content, webinars, and recordings for small business and personal financial education under the HarborOne U name. The company operates through a network of full-service branches located in Massachusetts and Rhode Island, as well as commercial lending offices in each of Boston, Massachusetts, and Providence, Rhode Island, as well as administrative offices in Brockton, Massachusetts, as well as ATM locations in Massachusetts. HarborOne Bancorp, Inc. was founded in 1917 and is headquartered in Brockton, Massachusetts.