Arrow Financial (NASDAQ:AROW) vs. HBT Financial (NASDAQ:HBT) Head to Head Comparison

Arrow Financial (NASDAQ:AROW) and HBT Financial (NASDAQ:HBT) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, dividends, valuation, earnings, institutional ownership and profitability.

Analyst Ratings

This is a summary of recent ratings for Arrow Financial and HBT Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arrow Financial	0	3	3	0	2.50
HBT Financial	0	2	3	2	3.00

Arrow Financial currently has a consensus price target of $41.62, indicating a potential upside of 12.96%. HBT Financial has a consensus price target of $37.40, indicating a potential upside of 5.12%. Given Arrow Financial’s higher possible upside, analysts clearly believe Arrow Financial is more favorable than HBT Financial.

Dividends

Arrow Financial pays an annual dividend of $1.20 per share and has a dividend yield of 3.3%. HBT Financial pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. Arrow Financial pays out 38.7% of its earnings in the form of a dividend. HBT Financial pays out 42.9% 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. Arrow Financial has increased its dividend for 7 consecutive years and HBT Financial has increased its dividend for 5 consecutive years. Arrow Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Arrow Financial and HBT Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arrow Financial	$242.58 million	2.81	$43.95 million	$3.10	11.89
HBT Financial	$266.65 million	4.85	$77.01 million	$2.33	15.27

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

Volatility & Risk

Arrow Financial has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, HBT Financial has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Arrow Financial	20.56%	12.13%	1.17%
HBT Financial	23.44%	13.46%	1.55%

Institutional & Insider Ownership

46.7% of Arrow Financial shares are owned by institutional investors. Comparatively, 78.6% of HBT Financial shares are owned by institutional investors. 3.5% of Arrow Financial shares are owned by company insiders. Comparatively, 51.9% of HBT Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

HBT Financial beats Arrow Financial on 11 of the 17 factors compared between the two stocks.

About Arrow Financial

Arrow Financial Corporation, a bank holding company, provides commercial and consumer banking, and financial products and services. The company’s deposit products include demand deposits, interest-bearing checking accounts, savings deposits, time deposits, and other time deposits. Its lending activities comprise commercial loans, such as term loans, time notes, and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, expansions, and enhancement to commercial properties, as well as commercial construction and land development loans to finance projects. The company’s lending activities also include consumer installment loans to finance personal expenditures, personal lines of credit, overdraft protection, and automobile loans; and residential real estate loans, fixed home equity loans, and home equity lines of credit for consumers to finance home improvements, debt consolidation, education, and other uses. In addition, it maintains an indirect lending program. Further, the company provides retirement planning, trust, and estate administration services for individuals, as well as pension, profit-sharing, and employee benefit plan administration services for corporations. Additionally, it offers insurance agency services comprising group health care policies and life insurance, and property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. It operates in the northeastern region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany, and Schenectady counties. Arrow Financial Corporation was founded in 1851 and is headquartered in Glens Falls, New York.

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.