Contrasting Capital Bancorp (NASDAQ:CBNK) and Hanmi Financial (NASDAQ:HAFC)

Hanmi Financial (NASDAQ:HAFC) and Capital Bancorp (NASDAQ:CBNK) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Dividends

Hanmi Financial pays an annual dividend of $1.12 per share and has a dividend yield of 3.4%. Capital Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 1.3%. Hanmi Financial pays out 36.8% of its earnings in the form of a dividend. Capital Bancorp pays out 16.9% 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. Hanmi Financial has raised its dividend for 1 consecutive years and Capital Bancorp has raised its dividend for 3 consecutive years.

Valuation and Earnings

This table compares Hanmi Financial and Capital Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hanmi Financial	$444.90 million	2.16	$76.09 million	$3.04	10.72
Capital Bancorp	$310.06 million	2.22	$57.17 million	$3.31	12.73

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

Analyst Ratings

This is a breakdown of current recommendations for Hanmi Financial and Capital Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hanmi Financial	0	4	2	0	2.33
Capital Bancorp	0	6	1	0	2.14

Hanmi Financial presently has a consensus target price of $33.40, indicating a potential upside of 2.47%. Capital Bancorp has a consensus target price of $41.00, indicating a potential downside of 2.71%. Given Hanmi Financial’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Hanmi Financial is more favorable than Capital Bancorp.

Insider and Institutional Ownership

88.7% of Hanmi Financial shares are held by institutional investors. Comparatively, 56.1% of Capital Bancorp shares are held by institutional investors. 2.1% of Hanmi Financial shares are held by insiders. Comparatively, 33.5% of Capital Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hanmi Financial	20.06%	11.30%	1.15%
Capital Bancorp	16.29%	13.46%	1.48%

Volatility and Risk

Hanmi Financial has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, Capital Bancorp has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Summary

Hanmi Financial beats Capital Bancorp on 9 of the 17 factors compared between the two stocks.

About Hanmi Financial

Hanmi Financial Corporation is the bank holding company for Hanmi Bank, a commercial bank founded in 1982 to serve Korean-American communities. The company is headquartered in Los Angeles and serves businesses and individuals in California and other U.S. markets. Hanmi Bank provides business and personal deposit accounts, commercial real estate and business loans, Small Business Administration lending, and cash-management and other banking services. Its offerings include online and mobile banking, treasury management, and international banking services.

About Capital Bancorp

Capital Bancorp, Inc. is a bank holding company headquartered in Rockville, Maryland, and the parent of Capital Bank, N.A. The company provides banking services to businesses, professionals, nonprofits and individuals, primarily in Maryland, Washington, D.C., and Northern Virginia. Capital Bank offers deposit accounts, commercial lending, commercial real estate financing and treasury management services, along with mortgage and consumer banking products. Its OpenSky business provides secured credit cards through digital channels.