Hanmi Financial (NASDAQ: HAFC) and Hudson Valley (NYSE:HVB) are both small-cap banks – nec companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, dividends, risk, profitability and institutional ownership.

Insider & Institutional Ownership

90.0% of Hanmi Financial shares are held by institutional investors. 3.9% of Hanmi Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Hanmi Financial pays an annual dividend of $0.84 per share and has a dividend yield of 2.6%. Hudson Valley does not pay a dividend. Hanmi Financial pays out 47.2% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Hanmi Financial 24.54% 10.60% 1.18%
Hudson Valley 17.98% 6.34% 0.61%

Analyst Recommendations

This is a breakdown of recent ratings for Hanmi Financial and Hudson Valley, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hanmi Financial 0 2 1 0 2.33
Hudson Valley 0 0 0 0 N/A

Hanmi Financial presently has a consensus target price of $32.33, indicating a potential upside of 0.41%. Given Hanmi Financial’s higher possible upside, research analysts clearly believe Hanmi Financial is more favorable than Hudson Valley.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hanmi Financial $211.55 million 4.93 $56.48 million $1.78 18.09
Hudson Valley N/A N/A N/A $0.55 51.29

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

Summary

Hanmi Financial beats Hudson Valley on 10 of the 12 factors compared between the two stocks.

About Hanmi Financial

Hanmi Financial Corporation is the holding company for Hanmi Bank (the Bank). The Bank is a community bank conducting general business banking, with its primary market encompassing the Korean-American community, as well as other ethnic communities across California, Colorado, Georgia, Illinois, New York, Texas, Virginia and Washington. The Bank’s client base reflects the multi-ethnic composition of these communities. The Bank maintains a branch network of full-service branch offices in California, Illinois, New Jersey, New York, Texas and Virginia, and loan production offices in California, Colorado, Texas, Virginia and Washington State. Its lending activities include real estate loans (commercial property, construction and residential property), commercial and industrial loans (commercial term loans, commercial lines of credit and international), and consumer loans and small business administration (SBA) loans. Its revenues are derived from interest and fees on its loans.

About Hudson Valley

Hudson Valley Holding Corp. (Hudson Valley) is a bank holding company. The Company provides financial services through its wholly owned subsidiary, Hudson Valley Bank, N.A. (HVB or the Bank), a national banking association. HVB has 17 branch offices in Westchester County, New York, four in Manhattan, New York, four in Bronx County, New York, two in Rockland County, New York, and one in Kings County, New York. The Company provides asset-based lending products through a wholly owned subsidiary of HVB, HVB Capital Credit LLC. The Company provides equipment loan and lease financing through a wholly owned subsidiary of HVB, HVB Equipment Capital, LLC. The Company’s principal customers are businesses, professionals, municipalities, not-for-profit organizations and individuals. In addition, the Company also offers a software application designed to meet the administrative needs of bankruptcy trustees through a marketing and licensing agreement with the application vendor.

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