Financial Contrast: Esquire Financial (NASDAQ:ESQ) vs. Business First Bancshares (NASDAQ:BFST)

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Esquire Financial and Business First Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Esquire Financial	0	1	2	1	3.00
Business First Bancshares	0	0	4	0	3.00

Esquire Financial currently has a consensus price target of $120.33, suggesting a potential upside of 5.99%. Business First Bancshares has a consensus price target of $32.33, suggesting a potential upside of 12.39%. Given Business First Bancshares’ higher probable upside, analysts clearly believe Business First Bancshares is more favorable than Esquire Financial.

Dividends

Esquire Financial pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.1%. Esquire Financial pays out 13.4% of its earnings in the form of a dividend. Business First Bancshares pays out 21.3% 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. Esquire Financial has increased its dividend for 4 consecutive years and Business First Bancshares has increased its dividend for 2 consecutive years.

Profitability

This table compares Esquire Financial and Business First Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Esquire Financial	29.96%	18.30%	2.30%
Business First Bancshares	17.02%	11.10%	1.12%

Insider and Institutional Ownership

54.7% of Esquire Financial shares are held by institutional investors. Comparatively, 47.4% of Business First Bancshares shares are held by institutional investors. 13.9% of Esquire Financial shares are held by insiders. Comparatively, 5.7% of Business First Bancshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Esquire Financial has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500. Comparatively, Business First Bancshares has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.

Earnings and Valuation

This table compares Esquire Financial and Business First Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Esquire Financial	$164.50 million	5.96	$50.82 million	$5.95	19.08
Business First Bancshares	$516.55 million	1.82	$87.86 million	$2.82	10.20

Business First Bancshares has higher revenue and earnings than Esquire Financial. Business First 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.

Summary

Esquire Financial beats Business First Bancshares on 11 of the 17 factors compared between the two stocks.

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.

About Business First Bancshares

Business First Bancshares, Inc. operates as the bank holding company for b1BANK that provides various banking products and services in Louisiana and Texas. It offers various deposit products and services, including checking, demand, money market, time, and savings accounts; and certificates of deposits, remote deposit capture, and direct deposit services. The company also provides commercial and industrial loans, such as working capital, term, equipment financing, asset acquisition, expansion and development, borrowing base, and other loan products, as well as commercial lines of credit, accounts receivable factoring, agricultural financing, and letters of credit; construction and development loans; commercial real estate loans; residential real estate loans comprising first and second lien 1-4 family mortgage loans, and home equity lines of credit; and consumer loans, including secured and unsecured installment, and term loans. In addition, it offers wealth management products, including mutual funds, annuities, individual retirement accounts, and other financial products, as well as other fiduciary and private banking products and services. Further, the company provides a range of other financial services comprising debit and credit cards, treasury and cash management, merchant, automated clearing house, lock-box, receivables factoring, correspondent banking, and other treasury services, as well as employee and payroll benefits solutions; and drive-through banking facilities, automated teller machines, night depository, personalized checks, electronic funds transfer, domestic and foreign wire transfer, traveler's checks, vault, loan and deposit sweep accounts, online and mobile banking, e-statements, and bank-by-mail services. Business First Bancshares, Inc. was founded in 2006 and is headquartered in Baton Rouge, Louisiana.