Hancock (NASDAQ: HBHC) and American River Bankshares (NASDAQ:AMRB) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Hancock and American River Bankshares, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hancock 0 4 4 1 2.67
American River Bankshares 1 0 0 0 1.00

Hancock currently has a consensus target price of $51.78, suggesting a potential upside of 0.74%. Given Hancock’s stronger consensus rating and higher possible upside, research analysts clearly believe Hancock is more favorable than American River Bankshares.

Volatility & Risk

Hancock has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, American River Bankshares has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500.

Valuation and Earnings

This table compares Hancock and American River Bankshares’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hancock $982.95 million 4.45 $149.29 million $2.49 20.64
American River Bankshares $23.20 million 4.14 $6.40 million $0.84 17.92

Hancock has higher revenue and earnings than American River Bankshares. American River Bankshares is trading at a lower price-to-earnings ratio than Hancock, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Hancock and American River Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hancock 19.08% 8.27% 0.90%
American River Bankshares 24.61% 6.66% 0.84%

Insider and Institutional Ownership

77.2% of Hancock shares are held by institutional investors. Comparatively, 53.8% of American River Bankshares shares are held by institutional investors. 1.2% of Hancock shares are held by insiders. Comparatively, 12.5% of American River Bankshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Hancock pays an annual dividend of $0.96 per share and has a dividend yield of 1.9%. American River Bankshares pays an annual dividend of $0.20 per share and has a dividend yield of 1.3%. Hancock pays out 38.6% of its earnings in the form of a dividend. American River Bankshares pays out 23.8% 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.

Summary

Hancock beats American River Bankshares on 14 of the 17 factors compared between the two stocks.

Hancock Company Profile

Hancock Holding Company is a financial services company that provides a network of service financial choices to the Gulf South region, through its bank subsidiary, Whitney Bank (the Bank), a Mississippi state bank. The Company operates through overall banking operations segment. The Bank operates under brands, such as Hancock Bank in Mississippi, Alabama and Florida, and Whitney Bank in Louisiana and Texas. The Bank operates across the Gulf South region, which consists of southern Mississippi; southern and central Alabama; southern Louisiana; the northern, central, and panhandle regions of Florida; Houston, Texas, and Nashville, Tennessee. The Bank offers a range of traditional and online community banking services to commercial, small business and retail customers, providing a range of transaction and savings deposit products, treasury management services and investment brokerage services, among others.

American River Bankshares Company Profile

American River Bankshares is a bank holding company. The Company’s banking subsidiary is American River Bank (the Bank). The Bank’s primary business is serving the commercial banking needs of small to mid-sized businesses. The Bank accepts checking and savings deposits; offers money market deposit accounts and certificates of deposit; makes secured and unsecured commercial loans, secured real estate loans, and other installment and term loans, and offers other customary banking services. The Bank also conducts lease financing for various types of business equipment, from computer software to heavy earth-moving equipment. It serves various communities located in Sacramento, Placer, Yolo, El Dorado, Sonoma and Amador counties. It also serves Alameda, Contra Costa and Santa Clara Counties through loan production offices located in the Cities of San Jose and San Ramon. Its loans include real estate construction loans; lease financing receivable; agriculture loans, and consumer loans.

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