M&F Bancorp (OTCMKTS:MFBP) versus Eagle Financial Services (NASDAQ:EFSI) Head to Head Contrast

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

Volatility and Risk

Eagle Financial Services has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500. Comparatively, M&F Bancorp has a beta of -0.63, suggesting that its share price is 163% less volatile than the S&P 500.

Dividends

Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 3.1%. M&F Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. Eagle Financial Services pays out 55.6% of its earnings in the form of a dividend. M&F Bancorp pays out 12.1% 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. Eagle Financial Services has raised its dividend for 14 consecutive years. Eagle Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Financial Services	$112.88 million	1.89	$15.34 million	$2.23	17.78
M&F Bancorp	$29.33 million	1.22	$4.77 million	$1.99	9.34

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

Institutional and Insider Ownership

0.3% of Eagle Financial Services shares are held by institutional investors. 8.7% of Eagle Financial Services shares are held by company insiders. Comparatively, 2.9% of M&F Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Eagle Financial Services	9.30%	10.17%	0.87%
M&F Bancorp	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current recommendations for Eagle Financial Services and M&F Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Financial Services	0	1	2	0	2.67
M&F Bancorp	0	0	0	0	0.00

Eagle Financial Services presently has a consensus price target of $39.50, indicating a potential downside of 0.35%. Given Eagle Financial Services’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Eagle Financial Services is more favorable than M&F Bancorp.

Summary

Eagle Financial Services beats M&F Bancorp on 16 of the 17 factors compared between the two stocks.

About Eagle Financial Services

Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke County that provides various retail and commercial banking products and services in the Shenandoah Valley and Northern Virginia. The company’s deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers personal and retirement plan services; investment services comprising tax-deferred annuities, IRAs and rollovers, mutual funds, retirement plans, college savings plans, life insurance, long term care insurance, fixed income investing, brokerage CDs, and full service or discount brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through twelve full-service branches, two loan production offices, one wealth management office, and one drive-through only facility, as well as 13 ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, Virginia.

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.