Hanmi Financial (NASDAQ:HAFC) and Centerstate Bank (NASDAQ:CSFL) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Risk and Volatility

Hanmi Financial has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Centerstate Bank has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.

Institutional & Insider Ownership

88.7% of Hanmi Financial shares are owned by institutional investors. Comparatively, 67.1% of Centerstate Bank shares are owned by institutional investors. 2.9% of Hanmi Financial shares are owned by insiders. Comparatively, 1.8% of Centerstate Bank shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Hanmi Financial pays an annual dividend of $0.96 per share and has a dividend yield of 5.2%. Centerstate Bank pays an annual dividend of $0.44 per share and has a dividend yield of 1.9%. Hanmi Financial pays out 50.5% of its earnings in the form of a dividend. Hanmi Financial has raised its dividend for 5 consecutive years and Centerstate Bank has raised its dividend for 3 consecutive years. Hanmi Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Hanmi Financial and Centerstate Bank, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hanmi Financial 0 4 0 0 2.00
Centerstate Bank 0 0 4 0 3.00

Hanmi Financial currently has a consensus price target of $24.17, suggesting a potential upside of 31.41%. Centerstate Bank has a consensus price target of $28.75, suggesting a potential upside of 22.13%. Given Hanmi Financial’s higher probable upside, analysts clearly believe Hanmi Financial is more favorable than Centerstate Bank.

Profitability

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

Net Margins Return on Equity Return on Assets
Hanmi Financial 21.65% 10.71% 1.10%
Centerstate Bank 27.16% 9.64% 1.56%

Earnings and Valuation

This table compares Hanmi Financial and Centerstate Bank’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hanmi Financial $258.92 million 2.20 $57.87 million $1.90 9.68
Centerstate Bank $565.76 million 5.37 $156.43 million N/A N/A

Centerstate Bank has higher revenue and earnings than Hanmi Financial.

Summary

Centerstate Bank beats Hanmi Financial on 8 of the 15 factors compared between the two stocks.

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. 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 24, 2019, it operated a network of 39 full-service branches and 9 loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington, and Georgia. The company was incorporated in 2000 and is headquartered in Los Angeles, California.

About Centerstate Bank

CenterState Bank Corporation operates as the holding company for CenterState Bank, N.A. that provides various consumer and commercial banking services to individuals, businesses, and industries. The company accepts various deposit products, such as savings, demand, negotiable order of withdrawal, and money market deposit accounts, as well as certificates of deposit and time deposits. Its loan products include real estate loans to individuals and businesses for the purchase, improvement of, or investment in real estate; construction of single-family residential and commercial units; and development of single-family residential building lots. The company's loan products also comprise commercial loans to small-to-medium sized businesses for working capital, equipment purchases, and various other business purposes; and consumer loans consisting of loans to individuals for various consumer purposes, as well as business purpose loans. It also offers mutual funds, annuities, and other investment products. In addition, the company sells fixed income securities; and provides hedging, loan brokerage, correspondent bank deposits, safe-keeping, bond accounting, asset/liability consulting, international wires, clearing and corporate checking account, and other correspondent banking related services. As of December 31, 2018, it operated 126 full service banking offices throughout Florida, Georgia, and Alabama; 1 loan production office in Florida; and 1 loan production office in Macon, Georgia. The company was formerly known as CenterState Banks, Inc. and changed its name to CenterState Bank Corporation in September 2017. CenterState Bank Corporation was founded in 1989 and is headquartered in Winter Haven, Florida.

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