Analyzing Sandy Spring Bancorp (NASDAQ:SASR) & Hanmi Financial (NASDAQ:HAFC)

Sandy Spring Bancorp (NASDAQ:SASRGet Rating) and Hanmi Financial (NASDAQ:HAFCGet Rating) 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, analyst recommendations, profitability, institutional ownership, risk, dividends and earnings.

Insider and Institutional Ownership

66.4% of Sandy Spring Bancorp shares are held by institutional investors. Comparatively, 87.1% of Hanmi Financial shares are held by institutional investors. 3.2% of Sandy Spring Bancorp shares are held by insiders. Comparatively, 1.5% of Hanmi Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Sandy Spring Bancorp has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Hanmi Financial has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Sandy Spring Bancorp and Hanmi Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sandy Spring Bancorp 0 1 1 0 2.50
Hanmi Financial 0 1 1 0 2.50

Sandy Spring Bancorp currently has a consensus price target of $55.50, suggesting a potential upside of 34.09%. Hanmi Financial has a consensus price target of $27.00, suggesting a potential upside of 15.24%. Given Sandy Spring Bancorp’s higher probable upside, equities analysts plainly believe Sandy Spring Bancorp is more favorable than Hanmi Financial.

Dividends

Sandy Spring Bancorp pays an annual dividend of $1.36 per share and has a dividend yield of 3.3%. Hanmi Financial pays an annual dividend of $0.88 per share and has a dividend yield of 3.8%. Sandy Spring Bancorp pays out 31.3% of its earnings in the form of a dividend. Hanmi Financial pays out 26.3% 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. Sandy Spring Bancorp has raised its dividend for 13 consecutive years and Hanmi Financial has raised its dividend for 2 consecutive years. Hanmi Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Sandy Spring Bancorp and Hanmi Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sandy Spring Bancorp $552.34 million 3.39 $235.11 million $4.34 9.54
Hanmi Financial $257.17 million 2.78 $98.68 million $3.35 6.99

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

Profitability

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

Net Margins Return on Equity Return on Assets
Sandy Spring Bancorp 37.99% 13.08% 1.55%
Hanmi Financial 39.39% 16.52% 1.52%

Summary

Sandy Spring Bancorp beats Hanmi Financial on 9 of the 15 factors compared between the two stocks.

Sandy Spring Bancorp Company Profile (Get Rating)

Sandy Spring Bancorp, Inc. operates as the bank holding company for Sandy Spring Bank that provides commercial and retail banking, mortgage, private banking, and trust services to individuals and businesses. It operates through three segments: Community Banking, Insurance, and Investment Management. The Community Banking segment offers financial products and services, including various loan and deposit products. Its loan products include commercial real estate loans, commercial construction loans, and other commercial loans; residential real estate loans; and consumer loans comprising home equity loans and lines, installment loans, and personal lines of credit. The Insurance segment provides general insurance agency services and annuities, such as commercial, personal, and medical liability lines. The Investment Management segment offers investment management and financial planning, including cash flow analysis, investment review, tax and retirement planning, insurance analysis, and estate planning to individuals, families, small businesses, and associations. It also provides personal trust and wealth management services. The company operates a network of approximately 50 locations in Maryland, Northern Virginia, and Washington D.C. Sandy Spring Bancorp, Inc. was founded in 1868 and is headquartered in Olney, Maryland.

Hanmi Financial Company Profile (Get Rating)

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, such as 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, secured and unsecured loans, home equity loans, residential mortgages, and credit cards; SBA and trade finance lending to small and middle market businesses; 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 February 28, 2022, it operated a network of 35 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 1982 and is headquartered in Los Angeles, California.

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