Head-To-Head Analysis: Equity Bancshares (NYSE:EQBK) & Hanmi Financial (NASDAQ:HAFC)

Equity Bancshares (NYSE:EQBK) and Hanmi Financial (NASDAQ:HAFC) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, earnings and profitability.

Institutional & Insider Ownership

71.8% of Equity Bancshares shares are owned by institutional investors. Comparatively, 88.7% of Hanmi Financial shares are owned by institutional investors. 14.5% of Equity Bancshares shares are owned by insiders. Comparatively, 2.1% of Hanmi Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Equity Bancshares and Hanmi Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equity Bancshares	$367.98 million	2.72	$22.73 million	$1.67	29.08
Hanmi Financial	$444.90 million	2.15	$76.09 million	$2.97	10.85

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

Analyst Recommendations

This is a summary of recent ratings for Equity Bancshares and Hanmi Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equity Bancshares	0	4	4	1	2.67
Hanmi Financial	0	4	2	0	2.33

Equity Bancshares presently has a consensus target price of $55.33, suggesting a potential upside of 13.92%. Hanmi Financial has a consensus target price of $33.00, suggesting a potential upside of 2.42%. Given Equity Bancshares’ stronger consensus rating and higher probable upside, research analysts plainly believe Equity Bancshares is more favorable than Hanmi Financial.

Volatility and Risk

Equity Bancshares has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500. Comparatively, Hanmi Financial has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Equity Bancshares	8.26%	13.34%	1.46%
Hanmi Financial	19.82%	11.20%	1.13%

Dividends

Equity Bancshares pays an annual dividend of $0.72 per share and has a dividend yield of 1.5%. Hanmi Financial pays an annual dividend of $1.12 per share and has a dividend yield of 3.5%. Equity Bancshares pays out 43.1% of its earnings in the form of a dividend. Hanmi Financial pays out 37.7% 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. Equity Bancshares has increased its dividend for 3 consecutive years and Hanmi Financial has increased its dividend for 1 consecutive years. Hanmi Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Equity Bancshares beats Hanmi Financial on 11 of the 18 factors compared between the two stocks.

About Equity Bancshares

Equity Bancshares, Inc. operates as the bank holding company for Equity Bank that provides a range of banking, mortgage banking, and financial services to individual and corporate customers. The company accepts various demand, savings, money market, and time deposits. Its loan products include commercial and industrial, commercial real estate-backed, commercial lines of credit, working capital, term, equipment financing, acquisition, expansion and development, borrowing base, real estate construction, homebuilder, agricultural, government guaranteed, and other loan products to national and regional companies, restaurant franchisees, hoteliers, real estate developers, manufacturing and industrial companies, agribusiness companies, and other businesses. The company’s loan products also comprise various consumer loans to individuals and professionals, including residential real estate loans, home equity loans and lines of credit, installment loans, unsecured and secured personal lines of credit, overdraft protection, and letters of credit. It also provides debit cards; online banking solutions, such as access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions comprising remote check deposits with mobile bill pay; ATMs; and treasury management, wire transfer, automated clearing house, and stop payment services. In addition, the company offers cash management deposit products, such as lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts, as well as banking services through telephone, mail, and personal appointments. As of December 31, 2021, it operated a network of 69 branches in Arkansas, Kansas, Missouri, and Oklahoma. The company was founded in 2002 and is headquartered in Wichita, Kansas.

About Hanmi Financial

Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides business banking products and services in the United States. It offers various deposit products, including noninterest-bearing checking accounts, savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. The company also provides real estate loans, such as commercial property, construction, and residential property loans; and commercial and industrial loans, such as commercial term loans and commercial lines of credit; and international finance and trade services and products, such as letters of credit, and import and export financing. In addition, it offers 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. The company was founded in 1982 and is headquartered in Los Angeles, California.