Financial Comparison: Magyar Bancorp (NASDAQ:MGYR) vs. Byline Bancorp (NYSE:BY)

Magyar Bancorp (NASDAQ:MGYR) and Byline Bancorp (NYSE:BY) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

Dividends

Magyar Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.2%. Byline Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.3%. Magyar Bancorp pays out 22.5% of its earnings in the form of a dividend. Byline Bancorp pays out 15.6% 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 Byline Bancorp has increased its dividend for 1 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 held by institutional investors. Comparatively, 67.7% of Byline Bancorp shares are held by institutional investors. 11.1% of Magyar Bancorp shares are held by insiders. Comparatively, 28.8% of Byline Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Magyar Bancorp	18.32%	9.28%	1.09%
Byline Bancorp	21.86%	11.56%	1.47%

Analyst Recommendations

This is a summary of current ratings and target prices for Magyar Bancorp and Byline Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magyar Bancorp	0	1	0	0	2.00
Byline Bancorp	0	1	2	1	3.00

Byline Bancorp has a consensus target price of $36.00, suggesting a potential downside of 3.75%. Given Byline Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Byline Bancorp is more favorable than Magyar Bancorp.

Volatility and Risk

Magyar Bancorp has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500. Comparatively, Byline Bancorp has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Earnings and Valuation

This table compares Magyar Bancorp and Byline Bancorp”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	1.97	$9.76 million	$1.78	10.00
Byline Bancorp	$449.96 million	3.77	$130.05 million	$3.07	12.18

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

Summary

Byline Bancorp beats Magyar Bancorp on 16 of the 18 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 Byline Bancorp

Byline Bancorp, Inc. operates as the bank holding company for Byline Bank that provides various banking products and services for small and medium sized businesses, commercial real estate and financial sponsors, and consumers in the United States. It offers various retail deposit products, including non-interest-bearing accounts, money market demand accounts, savings accounts, interest-bearing checking accounts, and time deposits; ATM and debit cards; and online, mobile, and text banking services, as well as commercial deposits. The company also provides term loans, revolving lines of credit, and construction financing services; senior secured financing solutions to private equity backed lower middle market companies; small business administration and united states department of agriculture loans; and treasury management products and services. In addition, it offers financing solutions for equipment vendors and their end users; syndication services; and investment, trust, and wealth management services that include fiduciary and executor services, financial planning solutions, investment advisory services, and private banking services for foundations and endowments, and high net worth individuals. The company was formerly known as Metropolitan Bank Group, Inc. and changed its name to Byline Bancorp, Inc. in 2015. Byline Bancorp, Inc. was founded in 1914 and is headquartered in Chicago, Illinois.