Head-To-Head Contrast: Sturgis Bancorp (OTCMKTS:STBI) & Hanmi Financial (NASDAQ:HAFC)

Sturgis Bancorp (OTCMKTS:STBIGet Rating) and Hanmi Financial (NASDAQ:HAFCGet Rating) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Earnings and Valuation

This table compares Sturgis Bancorp and Hanmi Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sturgis Bancorp $33.38 million 1.49 $6.34 million $3.06 7.60
Hanmi Financial $257.17 million 2.91 $98.68 million $3.48 7.05

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

Volatility and Risk

Sturgis Bancorp has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500. Comparatively, Hanmi Financial has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Sturgis Bancorp 18.95% N/A N/A
Hanmi Financial 37.65% 17.05% 1.54%

Dividends

Sturgis Bancorp pays an annual dividend of $0.68 per share and has a dividend yield of 2.9%. Hanmi Financial pays an annual dividend of $1.00 per share and has a dividend yield of 4.1%. Sturgis Bancorp pays out 22.2% of its earnings in the form of a dividend. Hanmi Financial pays out 28.7% 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 increased its dividend for 2 consecutive years. Hanmi Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

88.8% of Hanmi Financial shares are owned by institutional investors. 16.0% of Sturgis Bancorp shares are owned by insiders. Comparatively, 1.5% of Hanmi Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Sturgis Bancorp and Hanmi Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sturgis Bancorp 0 0 0 0 N/A
Hanmi Financial 0 0 2 0 3.00

Hanmi Financial has a consensus price target of $27.33, suggesting a potential upside of 11.38%. Given Hanmi Financial’s higher probable upside, analysts plainly believe Hanmi Financial is more favorable than Sturgis Bancorp.

Summary

Hanmi Financial beats Sturgis Bancorp on 13 of the 16 factors compared between the two stocks.

About Sturgis Bancorp

(Get Rating)

Sturgis Bancorp, Inc. is a bank holding company of Sturgis Bank & Trust Company, which engages in accepting deposits from the general public and making single family mortgage loans, as well as consumer and commercial loans. It operates through the following portfolio segments: Commercial, Commercial Real Estate and Commercial Construction, Consumer, Residential and Residential Construction, and Home Equity. The Commercial segment includes loans to businesses that are sole proprietorships, partnerships, limited liability companies and corporations. The Commercial Real Estate and Commercial Construction segment refers to the loans to individuals or businesses that are secured by improved and unimproved vacant land, farmland, commercial real property, multifamily residential properties, and all other conforming, non-residential properties. The Consumer segment consists of term loans or lines of credit for the purchase of consumer goods, vehicles or home improvement. The Residential and Residential Construction segment provides loans to purchase or refinance single family residences. The Home Equity segment includes loans to purchase consumer goods or home improvements. The company was

About Hanmi Financial

(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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