Financial Review: Equity Bancshares (NYSE:EQBK) & Hanmi Financial (NASDAQ:HAFC)

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

Dividends

Hanmi Financial pays an annual dividend of $1.12 per share and has a dividend yield of 3.5%. Equity Bancshares pays an annual dividend of $0.72 per share and has a dividend yield of 1.4%. Hanmi Financial pays out 37.7% of its earnings in the form of a dividend. Equity Bancshares pays out 43.1% 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. Hanmi Financial has raised its dividend for 1 consecutive years and Equity Bancshares has raised its dividend for 3 consecutive years. Hanmi Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hanmi Financial	$286.08 million	3.31	$76.09 million	$2.97	10.77
Equity Bancshares	$252.07 million	4.10	$22.73 million	$1.67	30.04

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 Ratings

This is a breakdown of current ratings and recommmendations for Hanmi Financial and Equity Bancshares, as reported by MarketBeat.com.

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

Hanmi Financial currently has a consensus price target of $33.00, suggesting a potential upside of 3.17%. Equity Bancshares has a consensus price target of $55.33, suggesting a potential upside of 10.31%. Given Equity Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe Equity Bancshares is more favorable than Hanmi Financial.

Volatility & Risk

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

Insider and Institutional Ownership

88.7% of Hanmi Financial shares are held by institutional investors. Comparatively, 71.8% of Equity Bancshares shares are held by institutional investors. 2.1% of Hanmi Financial shares are held by insiders. Comparatively, 14.5% of Equity Bancshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

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

Summary

Equity Bancshares beats Hanmi Financial on 11 of the 18 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. 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.

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.