Hanmi Financial (NASDAQ: HAFC) and BancFirst (NASDAQ:BANF) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Hanmi Financial and BancFirst’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hanmi Financial $242.74 million 4.01 $54.66 million $1.81 16.55
BancFirst $366.13 million 5.46 $86.43 million $2.72 22.48

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

Dividends

Hanmi Financial pays an annual dividend of $0.96 per share and has a dividend yield of 3.2%. BancFirst pays an annual dividend of $0.84 per share and has a dividend yield of 1.4%. Hanmi Financial pays out 53.0% of its earnings in the form of a dividend. BancFirst pays out 30.9% 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. BancFirst has raised its dividend for 16 consecutive years.

Analyst Recommendations

This is a summary of current ratings and target prices for Hanmi Financial and BancFirst, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hanmi Financial 0 2 2 0 2.50
BancFirst 0 1 0 0 2.00

Hanmi Financial presently has a consensus target price of $31.67, indicating a potential upside of 5.73%. BancFirst has a consensus target price of $60.00, indicating a potential downside of 1.88%. Given Hanmi Financial’s stronger consensus rating and higher probable upside, research analysts clearly believe Hanmi Financial is more favorable than BancFirst.

Insider & Institutional Ownership

89.2% of Hanmi Financial shares are held by institutional investors. Comparatively, 32.6% of BancFirst shares are held by institutional investors. 2.7% of Hanmi Financial shares are held by insiders. Comparatively, 40.1% of BancFirst shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Hanmi Financial has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, BancFirst has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Hanmi Financial 22.44% 10.67% 1.16%
BancFirst 24.74% 12.56% 1.35%

Summary

BancFirst beats Hanmi Financial on 11 of the 17 factors compared between the two stocks.

Hanmi Financial Company Profile

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 25, 2018, it operated a network of 40 full-service branches and 8 loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington, and Georgia. The company was founded in 2000 and is headquartered in Los Angeles, California.

BancFirst Company Profile

BancFirst Corporation operates as the bank holding company for BancFirst that provides a range of commercial banking services to retail customers, and small to medium-sized businesses. It operates through Metropolitan Banks, Community Banks, and Other Financial Services segments. The company offers checking accounts, negotiable order of withdrawal accounts, savings accounts, money market accounts, sweep accounts, club accounts, individual retirement accounts, and certificates of deposit, as well as overdraft protection and auto draft services. It also provides commercial, financial, and other loans for working capital, facilities acquisition or expansion, purchase of equipment, and other needs; construction, farmland, one-to-four family residence, multifamily residential property, and commercial real estate loans; and loans to finance purchases of consumer goods, such as automobiles, boats, household goods, vacations, and education. In addition, the company engages in the investment management and administration of trusts for individuals, corporations, and employee benefit plans, as well as bond trustee and paying agent business for various Oklahoma municipalities and governmental entities; and provision of item processing, research, and other correspondent banking services for financial institutions and governmental units. Further, it is involved in real estate investment and insurance agency services; and providing funds transfer, collection, safe deposit box, cash management, retail brokerage, and other services for individual and corporate customers. The company serves customers in non-metropolitan trade centers and cities in the metropolitan statistical areas of Oklahoma. It operates through 107 banking locations serving 58 communities in Oklahoma. The company was formerly known as United Community Corporation and changed its name to BancFirst Corporation in November 1988. BancFirst Corporation was incorporated in 1984 and is based in Oklahoma City, Oklahoma.

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