Critical Review: Bank Hapoalim (OTCMKTS:BKHYY) and MetroCity Bankshares (NASDAQ:MCBS)

Bank Hapoalim (OTCMKTS:BKHYY) and MetroCity Bankshares (NASDAQ:MCBS) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.

Profitability

This table compares Bank Hapoalim and MetroCity Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank Hapoalim	22.88%	14.08%	1.17%
MetroCity Bankshares	28.40%	15.16%	1.82%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Bank Hapoalim and MetroCity Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank Hapoalim	0	1	0	1	3.00
MetroCity Bankshares	0	1	1	0	2.50

MetroCity Bankshares has a consensus price target of $33.00, suggesting a potential downside of 3.51%. Given MetroCity Bankshares’ higher probable upside, analysts plainly believe MetroCity Bankshares is more favorable than Bank Hapoalim.

Insider & Institutional Ownership

25.3% of MetroCity Bankshares shares are held by institutional investors. 20.2% of MetroCity Bankshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Bank Hapoalim has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, MetroCity Bankshares has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Valuation & Earnings

This table compares Bank Hapoalim and MetroCity Bankshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank Hapoalim	$12.56 billion	2.49	$2.84 billion	$11.32	10.56
MetroCity Bankshares	$246.01 million	4.00	$68.53 million	$2.88	11.88

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

Dividends

Bank Hapoalim pays an annual dividend of $3.75 per share and has a dividend yield of 3.1%. MetroCity Bankshares pays an annual dividend of $1.16 per share and has a dividend yield of 3.4%. Bank Hapoalim pays out 33.1% of its earnings in the form of a dividend. MetroCity Bankshares pays out 40.3% 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.

Summary

MetroCity Bankshares beats Bank Hapoalim on 10 of the 17 factors compared between the two stocks.

About Bank Hapoalim

Bank Hapoalim B.M., together with its subsidiaries, provides various banking and financial products and services in Israel and internationally. It operates through Household, Private Banking, Small businesses and micro businesses, Mid-sized businesses, Large businesses, Institutional entities, and Financial management segments. The company offers account-management services, lending for various purposes, deposits, and savings plans, and capital-market service; housing loans; research and advisory services; and pension advisory and retirement planning services. It also provides products and services for the expansion of a business, advanced digital services, and a service center specializing in businesses; credit for routine operations and investment financing, guarantees, letters of credit, foreign trade, and transactions in financial and derivative instruments, as well as investment services in various channels, such as foreign currency, shekels, and securities. In addition, the company offers financial services, including foreign-trade financing, financing of working capital, financing of assets overseas, complex financing transactions, syndication, and credit-risk transfers; and financing of construction projects, granting credit to customers, and issuing guarantees to buyers of homes. Further, it provides managers of mutual funds, managers of investment portfolios, and managers of provident funds, study funds, and pension funds; trading activities; underwriting services; and brokerage and custody services. The company serves households, private-banking customers, foreign residents, small businesses, financial-asset managers, middle-market business clients, and large corporations. Bank Hapoalim B.M. was founded in 1921 and is based in Tel Aviv, Israel.

About MetroCity Bankshares

MetroCity Bankshares, Inc. operates as the bank holding company for Metro City Bank that engages in the provision of banking products and services in the United States. It offers customary banking services, such as consumer and commercial checking accounts, savings, and money market accounts, as well as certificates of deposit. The company also provides commercial and consumer loans, including single family residential loans; construction and development, and owner and non-owner occupied commercial real estate loans; letters of credit; and commercial and industrial loans, residential mortgage loans, and SBA loans. In addition, it offers online banking services, which include access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions, such as remote check deposit with mobile bill pay; and automated teller machines and telephone banking services. Further, it provides debit cards for checking customers, direct deposits, and cashier's checks; treasury management services, including wire transfer, automated clearing house, and stop payments services; and cash management deposit products, such as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company was founded in 2006 and is headquartered in Atlanta, Georgia.