Head to Head Review: Malaga Financial (OTCMKTS:MLGF) and Summit State Bank (NASDAQ:SSBI)

Malaga Financial (OTCMKTS:MLGF) and Summit State Bank (NASDAQ:SSBI) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, analyst recommendations, earnings, valuation and risk.

Dividends

Malaga Financial pays an annual dividend of $1.00 per share and has a dividend yield of 4.6%. Summit State Bank pays an annual dividend of $0.16 per share and has a dividend yield of 1.2%. Malaga Financial pays out 45.9% of its earnings in the form of a dividend. Summit State Bank pays out 15.8% 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.

Analyst Ratings

This is a summary of recent ratings for Malaga Financial and Summit State Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Malaga Financial	0	0	0	0	0.00
Summit State Bank	0	1	0	0	2.00

Volatility & Risk

Malaga Financial has a beta of 0.1, indicating that its stock price is 90% less volatile than the S&P 500. Comparatively, Summit State Bank has a beta of 0.18, indicating that its stock price is 82% less volatile than the S&P 500.

Earnings and Valuation

This table compares Malaga Financial and Summit State Bank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Malaga Financial	N/A	N/A	$21.55 million	$2.18	9.95
Summit State Bank	$34.99 million	2.63	$6.80 million	$1.01	13.47

Malaga Financial has higher earnings, but lower revenue than Summit State Bank. Malaga Financial is trading at a lower price-to-earnings ratio than Summit State Bank, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Malaga Financial and Summit State Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Malaga Financial	N/A	N/A	N/A
Summit State Bank	11.55%	N/A	N/A

Insider and Institutional Ownership

1.2% of Malaga Financial shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Summit State Bank beats Malaga Financial on 6 of the 10 factors compared between the two stocks.

About Malaga Financial

Malaga Financial Corporation operates as the holding company for Malaga Bank that provides various community banking products and services to personal and business customers. It offers checking, savings, NOW, and money market accounts, certificates of deposits, business banking, consumer, and demand deposits. The company also provides commercial real estate, single and multi-family residential mortgage, consumer, 14-unit investment property, construction, personal, and business loans; home equity lines of credit; and certificates of deposit. In addition, it offers coupon redemption, direct deposit, overdraft lines of credit, telephone transfers, U.S. savings bond redemption, and wire transfer services; and ATM and VISA debit cards, bank by mail, medallion signature guarantee, night depository, notary, safe deposit boxes, and trust deed note collection services. Further, the company provides online banking services, including bill payer, e-statements, and mobile banking services. The company was incorporated in 2002 and is headquartered in Palos Verdes Estates, California.

About Summit State Bank

Summit State Bank engages in providing an array of financial services to small and medium-sized businesses, their owners and employees, entrepreneurs, high net worth families, foundations, estates, and individual consumers. It specializes in business services, personal accounts, nonprofit programs, and mobile banking ranging from lending, checking, merchant, eBanking, automated teller machines, equity loans, and others. The company was founded on December 20, 1982 and is headquartered in Santa Rosa, CA.