Critical Review: Byline Bancorp (NYSE:BY) vs. HBT Financial (NASDAQ:HBT)

HBT Financial (NASDAQ:HBT) and Byline Bancorp (NYSE:BY) 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, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Dividends

HBT Financial pays an annual dividend of $0.84 per share and has a dividend yield of 3.2%. Byline Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. HBT Financial pays out 33.9% of its earnings in the form of a dividend. Byline Bancorp pays out 14.2% 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. HBT Financial has increased its dividend for 5 consecutive years and Byline Bancorp has increased its dividend for 1 consecutive years. HBT Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

HBT Financial has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500. Comparatively, Byline Bancorp has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Earnings and Valuation

This table compares HBT Financial and Byline Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HBT Financial	$234.02 million	3.50	$71.78 million	$2.48	10.50
Byline Bancorp	$624.78 million	2.18	$120.76 million	$2.81	10.56

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

Analyst Recommendations

This is a summary of current recommendations and price targets for HBT Financial and Byline Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HBT Financial	0	4	3	0	2.43
Byline Bancorp	0	2	3	0	2.60

HBT Financial currently has a consensus target price of $28.50, suggesting a potential upside of 9.45%. Byline Bancorp has a consensus target price of $33.25, suggesting a potential upside of 12.08%. Given Byline Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Byline Bancorp is more favorable than HBT Financial.

Profitability

This table compares HBT Financial and Byline Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HBT Financial	26.64%	13.81%	1.57%
Byline Bancorp	20.01%	11.26%	1.36%

Institutional & Insider Ownership

78.6% of HBT Financial shares are held by institutional investors. Comparatively, 67.7% of Byline Bancorp shares are held by institutional investors. 59.7% of HBT Financial shares are held by company insiders. Comparatively, 28.8% of Byline Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

About HBT Financial

HBT Financial, Inc. operates as the bank holding company for Heartland Bank and Trust Company that provides business, commercial, and retail banking products and services to individuals, businesses, and municipal entities in Central and Northeastern Illinois, and Eastern Iowa. The company's deposits accounts consist of noninterest-bearing demand deposits, interest-bearing transaction accounts, money market accounts, savings accounts, certificates of deposits, health savings accounts, and individual retirement accounts. Its loan offering comprises owner and non-owner occupied commercial real estate; construction and land development and multi-family; commercial and industrial; agricultural and farmland; and one-to-four family residential loans, as well as municipal, consumer, and other loans. The company also offers wealth management services, including financial planning to consumers, trusts, and estates; trustee and custodial; investment management; corporate retirement plan consulting and administration; and retail brokerage services. In addition, it provides farmland management, and farmland sales and services; commercial checking accounts; and treasury management services, as well as originates and sells residential mortgage loans. Further, the company offers digital banking services, such as online and mobile banking, and digital payment services, as well as personal financial management tools. The company was formerly known as Heartland Bancorp, Inc. and changed its name to HBT Financial, Inc. in September 2019. HBT Financial, Inc. was founded in 1920 and is headquartered in Bloomington, Illinois.

About Byline Bancorp

Byline Bancorp, Inc. operates as the bank holding company for Byline Bank that provides various banking products and services for small and medium sized businesses, commercial real estate and financial sponsors, and consumers in the United States. It offers various retail deposit products, including non-interest-bearing accounts, money market demand accounts, savings accounts, interest-bearing checking accounts, and time deposits; ATM and debit cards; and online, mobile, and text banking services, as well as commercial deposits. The company also provides term loans, revolving lines of credit, and construction financing services; senior secured financing solutions to private equity backed lower middle market companies; small business administration and united states department of agriculture loans; and treasury management products and services. In addition, it offers financing solutions for equipment vendors and their end users; syndication services; and investment, trust, and wealth management services that include fiduciary and executor services, financial planning solutions, investment advisory services, and private banking services for foundations and endowments, and high net worth individuals. The company was formerly known as Metropolitan Bank Group, Inc. and changed its name to Byline Bancorp, Inc. in 2015. Byline Bancorp, Inc. was founded in 1914 and is headquartered in Chicago, Illinois.