Head to Head Comparison: Magyar Bancorp (NASDAQ:MGYR) versus Nicolet Bankshares (NYSE:NIC)

Magyar Bancorp (NASDAQ:MGYR) and Nicolet Bankshares (NYSE:NIC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.

Analyst Ratings

This is a summary of recent ratings and target prices for Magyar Bancorp and Nicolet Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magyar Bancorp	0	1	0	0	2.00
Nicolet Bankshares	0	1	5	0	2.83

Nicolet Bankshares has a consensus price target of $176.50, indicating a potential upside of 19.12%. Given Nicolet Bankshares’ stronger consensus rating and higher possible upside, analysts plainly believe Nicolet Bankshares is more favorable than Magyar Bancorp.

Profitability

This table compares Magyar Bancorp and Nicolet Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magyar Bancorp	18.32%	9.38%	1.10%
Nicolet Bankshares	21.89%	13.92%	1.88%

Earnings & Valuation

This table compares Magyar Bancorp and Nicolet Bankshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magyar Bancorp	$58.42 million	1.94	$9.76 million	$1.78	9.80
Nicolet Bankshares	$556.52 million	5.69	$150.69 million	$8.53	17.37

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

Dividends

Magyar Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.3%. Nicolet Bankshares pays an annual dividend of $1.28 per share and has a dividend yield of 0.9%. Magyar Bancorp pays out 22.5% of its earnings in the form of a dividend. Nicolet Bankshares pays out 15.0% 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. Magyar Bancorp has increased its dividend for 3 consecutive years and Nicolet Bankshares has increased its dividend for 2 consecutive years. Magyar Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

46.3% of Magyar Bancorp shares are owned by institutional investors. Comparatively, 43.1% of Nicolet Bankshares shares are owned by institutional investors. 11.1% of Magyar Bancorp shares are owned by insiders. Comparatively, 7.2% of Nicolet Bankshares shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Magyar Bancorp has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500. Comparatively, Nicolet Bankshares has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Summary

Nicolet Bankshares beats Magyar Bancorp on 13 of the 17 factors compared between the two stocks.

About Magyar Bancorp

Magyar Bancorp, Inc. operates as the holding company for Magyar Bank that provides various consumer and commercial banking services to individuals, businesses, and nonprofit organizations in New Jersey, the United States. It accepts various deposit accounts, including demand, savings, NOW, money market, and retirement accounts, as well as certificates of deposit. The company also provides residential mortgage loans, multi-family and commercial real estate mortgage loans, home equity loans and lines of credit, commercial business loans, and construction loans, as well as small business administration loans. In addition, it offers non-deposit investment products and financial planning services, including insurance products, fixed and variable annuities, and retirement planning for individual and commercial customers; and buys, sells, and holds investment securities. The company has branch offices located in New Brunswick, North Brunswick, South Brunswick, Branchburg, Bridgewater, and Edison, New Jersey. Magyar Bancorp, Inc. was founded in 1922 and is headquartered in New Brunswick, New Jersey.

About Nicolet Bankshares

Nicolet Bankshares, Inc. operates as the bank holding company for Nicolet National Bank that provides banking products and services for businesses and individuals in Wisconsin and Michigan. The company accepts checking, savings, and money market accounts; various certificates of deposit; and individual retirement accounts. It also offers commercial loans, including commercial, industrial, and business loans and lines of credit; commercial real estate loans; agricultural (AG) production and AG real estate loans; commercial real estate investment real estate loans; construction and land development loans; residential real estate loans, such as residential first lien and junior lien mortgages, home equity loans, lines of credit, and residential construction loans; and consumer loans. In addition, the company provides cash management, international banking, personal brokerage, safe deposit boxes, and trust and fiduciary services, as well as wealth management and retirement plan services. Further, it offers mortgage refinancing; online services, such as commercial, retail, and trust online banking; automated bill payment, mobile banking deposits and account access, and remote deposit capture services; and other services consisting of wire transfers, debit cards, credit cards, pre-paid gift cards, direct deposits, and official bank checks, as well as facilitates crop insurance products. The company was formerly known as Green Bay Financial Corporation and changed its name to Nicolet Bankshares, Inc. in March 2002. The company was incorporated in 2000 and is headquartered in Green Bay, Wisconsin.