Analyzing First Federal Bancshares of Arkansas (BSF) and Mackinac Financial (MFNC)

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First Federal Bancshares of Arkansas (NASDAQ: MFNC) and Mackinac Financial (NASDAQ:MFNC) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Profitability

This table compares First Federal Bancshares of Arkansas and Mackinac Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Federal Bancshares of Arkansas 19.79% 10.00% 1.12%
Mackinac Financial 7.88% 7.97% 0.74%

Volatility & Risk

First Federal Bancshares of Arkansas has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500. Comparatively, Mackinac Financial has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for First Federal Bancshares of Arkansas and Mackinac Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Federal Bancshares of Arkansas 0 0 0 0 N/A
Mackinac Financial 0 0 2 0 3.00

Mackinac Financial has a consensus price target of $19.00, indicating a potential upside of 16.71%. Given Mackinac Financial’s higher possible upside, analysts clearly believe Mackinac Financial is more favorable than First Federal Bancshares of Arkansas.

Earnings & Valuation

This table compares First Federal Bancshares of Arkansas and Mackinac Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Federal Bancshares of Arkansas $103.10 million 3.78 $21.31 million N/A N/A
Mackinac Financial $48.42 million 3.60 $5.47 million $1.20 13.57

First Federal Bancshares of Arkansas has higher revenue and earnings than Mackinac Financial.

Insider & Institutional Ownership

13.2% of First Federal Bancshares of Arkansas shares are owned by institutional investors. Comparatively, 43.7% of Mackinac Financial shares are owned by institutional investors. 45.7% of First Federal Bancshares of Arkansas shares are owned by insiders. Comparatively, 24.7% of Mackinac Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

First Federal Bancshares of Arkansas pays an annual dividend of $0.12 per share and has a dividend yield of 1.2%. Mackinac Financial pays an annual dividend of $0.48 per share and has a dividend yield of 2.9%. Mackinac Financial pays out 40.0% of its earnings in the form of a dividend. Mackinac Financial has increased its dividend for 4 consecutive years. Mackinac Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

First Federal Bancshares of Arkansas beats Mackinac Financial on 10 of the 15 factors compared between the two stocks.

About First Federal Bancshares of Arkansas

Bear State Financial, Inc. operates as the bank holding company for Bear State Bank, N.A that provides various financial products to individuals and business customers. The company offers a range of retail and business deposit accounts, including noninterest and interest bearing checking, savings and money market, and individual retirement accounts, as well as certificates of deposit. It also provides loans comprising one-to four-family residential real estate, multifamily residential real estate, nonfarm nonresidential, farmland, construction and land development, and secured and unsecured commercial loans; and consumer loans, such as automobile, deposit account secured, and unsecured loans, as well as lines of credit. In addition, the company offers other financial services, such as automated teller machine services; telephone banking services; online banking services, including account access, bill payment, and e-statement services; mobile banking comprising remote deposit capture and funds transfer services; overdraft services; debit cards; and safe deposit boxes. As of January 18, 2018, it operated 42 branches, 3 personalized technology centers equipped with interactive teller machines, and 3 loan production offices in Arkansas, Missouri, and Southeast Oklahoma. The company was formerly known as First Federal Bancshares of Arkansas, Inc. and changed its name to Bear State Financial, Inc. in June 2014. Bear State Financial, Inc. incorporated in 1996 and is headquartered in Little Rock, Arkansas.

About Mackinac Financial

Mackinac Financial Corporation operates as the bank holding company for mBank that provides commercial and retail banking products and services in the United States. The company accepts interest bearing and non-interest bearing accounts, such as commercial and retail checking accounts, negotiable order of withdrawal accounts, money market accounts, individual retirement accounts, regular interest-bearing statement savings accounts, certificates of deposit, time deposits, and interest bearing transaction accounts. Its loan products include provides commercial loans to entities within real estate ? operators of nonresidential buildings industry; consumer loan products comprising installment, mortgages, and home equity loans, as well as residential mortgage loans; and commercial and governmental lease financing. The company also offers safe deposit facilities. As of March 27, 2018, it operated 12 branches in the Upper Peninsula; 4 branches in the Northern Lower Peninsula; 1 branch in Oakland County, Michigan; and 7 branches in northern Wisconsin. The company was formerly known as North Country Financial Corporation and changed its name to Mackinac Financial Corporation in December 2004. Mackinac Financial Corporation was incorporated in 1974 and is headquartered in Manistique, Michigan.

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