Comparing Hanmi Financial (HAFC) & Westamerica Bancorporation (WABC)

Hanmi Financial (NASDAQ:HAFC) and Westamerica Bancorporation (NASDAQ:WABC) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, profitability, institutional ownership and earnings.

Profitability

This table compares Hanmi Financial and Westamerica Bancorporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hanmi Financial 22.68% 10.76% 1.15%
Westamerica Bancorporation 28.19% 11.15% 1.19%

Volatility & Risk

Hanmi Financial has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, Westamerica Bancorporation has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Valuation & Earnings

This table compares Hanmi Financial and Westamerica Bancorporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hanmi Financial $242.74 million 2.94 $54.66 million $1.81 12.14
Westamerica Bancorporation $190.46 million 7.93 $50.02 million N/A N/A

Hanmi Financial has higher revenue and earnings than Westamerica Bancorporation.

Dividends

Hanmi Financial pays an annual dividend of $0.96 per share and has a dividend yield of 4.4%. Westamerica Bancorporation pays an annual dividend of $1.60 per share and has a dividend yield of 2.8%. Hanmi Financial pays out 53.0% of its earnings in the form of a dividend. Hanmi Financial has raised its dividend for 4 consecutive years and Westamerica Bancorporation has raised its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of current ratings for Hanmi Financial and Westamerica Bancorporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hanmi Financial 0 2 2 0 2.50
Westamerica Bancorporation 2 2 0 0 1.50

Hanmi Financial presently has a consensus price target of $29.67, suggesting a potential upside of 34.97%. Westamerica Bancorporation has a consensus price target of $54.67, suggesting a potential downside of 3.43%. Given Hanmi Financial’s stronger consensus rating and higher possible upside, research analysts clearly believe Hanmi Financial is more favorable than Westamerica Bancorporation.

Institutional & Insider Ownership

88.5% of Hanmi Financial shares are owned by institutional investors. Comparatively, 87.7% of Westamerica Bancorporation shares are owned by institutional investors. 3.9% of Hanmi Financial shares are owned by company insiders. Comparatively, 4.5% of Westamerica Bancorporation shares are owned by company 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.

Summary

Westamerica Bancorporation beats Hanmi Financial on 9 of the 16 factors compared between the two stocks.

Hanmi Financial Company Profile

Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides business banking products and services in the United States. The company offers various deposit products, including noninterest-bearing checking accounts, interest-bearing checking and savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. It also provides real estate loans, including commercial property, construction, and residential property loans; and commercial and industrial loans, such as commercial term loans and commercial lines of credit, as well as international finance, and trade services and products comprising letters of credit, and import and export financing. In addition, the company offers consumer loans that include automobile loans, secured and unsecured personal loans, home improvement loans, home equity lines of credit, unsecured lines of credit, and credit cards; and small business administration loans for business purposes, which comprise owner-occupied commercial real estate, business acquisitions, start-ups, franchise financing, working capital, improvements and renovations, inventory and equipment, and debt-refinancing, as well as equipment lease financing. As of January 25, 2018, it operated a network of 40 full-service branches and 8 loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington, and Georgia. The company was founded in 2000 and is headquartered in Los Angeles, California.

Westamerica Bancorporation Company Profile

Westamerica Bancorporation operates as a bank holding company for Westamerica Bank that provides various banking products and services to individual and commercial customers. The company accepts various deposit products, including retail savings and checking accounts, as well as certificates of deposit to local businesses and professionals. Its loan portfolio includes commercial, commercial and residential real estate, real estate construction, and consumer installment loans, as well as other loans primarily consisting of indirect automobile loans. Westamerica Bancorporation operates through 82 branch offices in 21 counties in Northern and Central California. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. Westamerica Bancorporation was founded in 1972 and is headquartered in San Rafael, California.

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