Esquire Financial (NASDAQ:ESQ) and Magyar Bancorp (NASDAQ:MGYR) Critical Analysis

Esquire Financial (NASDAQ:ESQ) and Magyar Bancorp (NASDAQ:MGYR) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Volatility & Risk

Esquire Financial has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, Magyar Bancorp has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500.

Dividends

Esquire Financial pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Magyar Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.3%. Esquire Financial pays out 13.4% of its earnings in the form of a dividend. Magyar Bancorp pays out 22.5% 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. Esquire Financial has increased its dividend for 4 consecutive years and Magyar Bancorp has increased its dividend for 3 consecutive years.

Institutional and Insider Ownership

54.7% of Esquire Financial shares are held by institutional investors. Comparatively, 46.3% of Magyar Bancorp shares are held by institutional investors. 18.0% of Esquire Financial shares are held by company insiders. Comparatively, 11.1% of Magyar Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Esquire Financial and Magyar Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Esquire Financial	29.96%	18.69%	2.35%
Magyar Bancorp	18.32%	9.38%	1.10%

Valuation & Earnings

This table compares Esquire Financial and Magyar Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Esquire Financial	$164.50 million	5.61	$50.82 million	$5.95	17.95
Magyar Bancorp	$58.42 million	1.93	$9.76 million	$1.78	9.78

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Esquire Financial and Magyar Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Esquire Financial	0	1	1	2	3.25
Magyar Bancorp	0	1	0	0	2.00

Esquire Financial presently has a consensus price target of $120.33, indicating a potential upside of 12.64%. Given Esquire Financial’s stronger consensus rating and higher probable upside, equities analysts plainly believe Esquire Financial is more favorable than Magyar Bancorp.

Summary

Esquire Financial beats Magyar Bancorp on 17 of the 18 factors compared between the two stocks.

About Esquire Financial

Esquire Financial Holdings, Inc. operates as the bank holding company for Esquire Bank, National Association that provides commercial banking products and services to legal industry and small businesses, and commercial and retail customers in the United States. The company offers checking, savings, money market, and time deposits, as well as certificates of deposit. It also provides commercial loans, such as short-term financing for inventory, receivables, the purchase of supplies, or other operating needs arising during the normal course of business, as well as loans to its qualified ISO customers; commercial lines of credit; consumer loans consisting of post-settlement consumer and structured settlement loans to plaintiffs and claimants, as well as loans to individuals for debt consolidation, medical expenses, living expenses, payment of outstanding bills, or other consumer needs; and real estate loans, such as multifamily, 1-4 family residential, commercial real estate, and construction loans, as well as merchant services. In addition, it offers cash management, cash sweep, online and mobile banking, individual retirement accounts, and working capital lines of credit. Esquire Financial Holdings, Inc. was founded in 2006 and is headquartered in Jericho, New York.

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.