Comparing Texas Community Bancshares (NASDAQ:TCBS) and Esquire Financial (NASDAQ:ESQ)

Texas Community Bancshares (NASDAQ:TCBS) and Esquire Financial (NASDAQ:ESQ) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.

Profitability

This table compares Texas Community Bancshares and Esquire Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Texas Community Bancshares	12.68%	6.14%	0.76%
Esquire Financial	29.30%	18.22%	2.27%

Volatility and Risk

Texas Community Bancshares has a beta of -0.03, suggesting that its stock price is 103% less volatile than the S&P 500. Comparatively, Esquire Financial has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.

Institutional and Insider Ownership

15.8% of Texas Community Bancshares shares are held by institutional investors. Comparatively, 54.7% of Esquire Financial shares are held by institutional investors. 15.3% of Texas Community Bancshares shares are held by company insiders. Comparatively, 13.9% of Esquire Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Texas Community Bancshares pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Esquire Financial pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Texas Community Bancshares pays out 19.8% of its earnings in the form of a dividend. Esquire Financial pays out 13.2% 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. Texas Community Bancshares has raised its dividend for 1 consecutive years and Esquire Financial has raised its dividend for 4 consecutive years.

Valuation and Earnings

This table compares Texas Community Bancshares and Esquire Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Texas Community Bancshares	$25.57 million	1.93	$2.84 million	$1.21	14.24
Esquire Financial	$159.56 million	8.98	$50.82 million	$6.06	19.53

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Texas Community Bancshares and Esquire Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Texas Community Bancshares	0	1	0	0	2.00
Esquire Financial	0	1	2	1	3.00

Esquire Financial has a consensus target price of $120.33, suggesting a potential upside of 1.65%. Given Esquire Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Esquire Financial is more favorable than Texas Community Bancshares.

Summary

Esquire Financial beats Texas Community Bancshares on 16 of the 18 factors compared between the two stocks.

About Texas Community Bancshares

Texas Community Bancshares, Inc. operates as the bank holding company for Mineola Community Bank, S.S.B. that provides loans and banking services to consumers and commercial customers in Mineola, Texas and the surrounding area, and the Dallas Fort Worth Metroplex. It generates a selection of deposit accounts, including savings accounts, checking accounts, certificates of deposit, and individual retirement accounts. The company also originates primarily one- to four-family residential mortgage loans, commercial real estate loans, and construction and land loans; and car, boat, share, unsecured loans, etc., as well as agricultural loans, commercial loans, and consumer and other loans. In addition, it invests in securities; and offers sweep account, safe deposit boxes, e-statement, cards, online banking, and mobile banking services. Texas Community Bancshares, Inc. was founded in 1934 and is headquartered in Mineola, Texas.

About Esquire Financial

Esquire Financial Holdings, Inc. operates as the bank holding company for Esquire Bank, National Association that provides commercial banking products and services to legal industry and small businesses, and commercial and retail customers in the United States. The company offers checking, savings, money market, and time deposits, as well as certificates of deposit. It also provides commercial loans, such as short-term financing for inventory, receivables, the purchase of supplies, or other operating needs arising during the normal course of business, as well as loans to its qualified ISO customers; commercial lines of credit; consumer loans consisting of post-settlement consumer and structured settlement loans to plaintiffs and claimants, as well as loans to individuals for debt consolidation, medical expenses, living expenses, payment of outstanding bills, or other consumer needs; and real estate loans, such as multifamily, 1-4 family residential, commercial real estate, and construction loans, as well as merchant services. In addition, it offers cash management, cash sweep, online and mobile banking, individual retirement accounts, and working capital lines of credit. Esquire Financial Holdings, Inc. was founded in 2006 and is headquartered in Jericho, New York.