Texas Capital Bancshares (NASDAQ:TCBI) and Macatawa Bank (NASDAQ:MCBC) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Profitability

This table compares Texas Capital Bancshares and Macatawa Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Texas Capital Bancshares 22.88% 13.29% 1.12%
Macatawa Bank 31.79% 15.18% 1.52%

Risk and Volatility

Texas Capital Bancshares has a beta of 1.84, meaning that its share price is 84% more volatile than the S&P 500. Comparatively, Macatawa Bank has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500.

Insider and Institutional Ownership

95.4% of Texas Capital Bancshares shares are owned by institutional investors. Comparatively, 32.0% of Macatawa Bank shares are owned by institutional investors. 0.5% of Texas Capital Bancshares shares are owned by insiders. Comparatively, 8.6% of Macatawa Bank shares are owned 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.

Analyst Ratings

This is a summary of current ratings and price targets for Texas Capital Bancshares and Macatawa Bank, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Texas Capital Bancshares 1 9 2 0 2.08
Macatawa Bank 0 0 0 0 N/A

Texas Capital Bancshares currently has a consensus target price of $65.22, indicating a potential upside of 15.64%. Given Texas Capital Bancshares’ higher probable upside, research analysts plainly believe Texas Capital Bancshares is more favorable than Macatawa Bank.

Valuation & Earnings

This table compares Texas Capital Bancshares and Macatawa Bank’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Texas Capital Bancshares $1.24 billion 2.28 $300.82 million $5.79 9.74
Macatawa Bank $86.54 million 4.20 $26.37 million $0.78 13.69

Texas Capital Bancshares has higher revenue and earnings than Macatawa Bank. Texas Capital Bancshares is trading at a lower price-to-earnings ratio than Macatawa Bank, indicating that it is currently the more affordable of the two stocks.

Dividends

Macatawa Bank pays an annual dividend of $0.28 per share and has a dividend yield of 2.6%. Texas Capital Bancshares does not pay a dividend. Macatawa Bank pays out 35.9% of its earnings in the form of a dividend. Macatawa Bank has increased its dividend for 3 consecutive years.

Texas Capital Bancshares Company Profile

Texas Capital Bancshares, Inc. operates as the bank holding company for Texas Capital Bank, National Association that provides various banking products and services for commercial businesses, and professionals and entrepreneurs. It offers business deposit products and services, including commercial checking accounts, lockbox accounts, and cash concentration accounts, as well as other treasury management services, including information services, wire transfer initiation, ACH initiation, account transfer, and service integration; and consumer deposit products, such as checking accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides commercial loans for general corporate purposes comprising financing for working capital, internal growth, and acquisitions, as well as financing for business insurance premiums; real estate term and construction loans; mortgage warehouse lending; mortgage correspondent aggregation; equipment finance and leasing; medium- and long-term tax-exempt loans; treasury management services, including online banking and debit and credit card services; and letters of credit. In addition, it offers personal wealth management and trust services; secured and unsecured loans; and online and mobile banking services. It operates in Austin, Dallas, Fort Worth, Houston, and San Antonio metropolitan areas of Texas. Texas Capital Bancshares, Inc. was founded in 1996 and is headquartered in Dallas, Texas.

Macatawa Bank Company Profile

Macatawa Bank Corporation operates as the bank holding company for Macatawa Bank that provides commercial and consumer banking and trust services. The company accepts various deposits, such as checking accounts, savings accounts, time deposits, regular and money market savings accounts, certificates of deposit, and demand deposits. Its loan products include commercial and industrial loans comprising loans to finance operations and equipment; commercial real estate loans, which consist of construction and development, and multi-family and other non-residential real estate loans; retail loans, such as residential mortgage loans; and consumer loans, including automobile loans, home equity lines of credit and installment loans, home improvement loans, deposit account loans, and other loans for household and personal purposes. The company also offers ATM and debit card processing, cash management, and trust and brokerage services. It serves individuals, businesses, associations, churches, nonprofit organizations, financial institutions, and government authorities through 26 branch offices, as well as a lending and operation service facility in Kent County, Ottawa County, and northern Allegan County, Michigan. Macatawa Bank Corporation was founded in 1997 and is headquartered in Holland, Michigan.

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