Critical Survey: Virginia National Bankshares (OTCMKTS:VABK) and Hanmi Financial (NASDAQ:HAFC)

Virginia National Bankshares (OTCMKTS:VABK – Get Rating) and Hanmi Financial (NASDAQ:HAFC – Get Rating) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Profitability

This table compares Virginia National Bankshares and Hanmi Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Virginia National Bankshares	33.80%	18.17%	1.46%
Hanmi Financial	30.36%	16.26%	1.42%

Earnings and Valuation

This table compares Virginia National Bankshares and Hanmi Financial’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Virginia National Bankshares	$70.39 million	2.17	$23.44 million	$4.54	6.28
Hanmi Financial	$308.01 million	1.46	$101.39 million	$3.36	4.38

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

Institutional & Insider Ownership

30.3% of Virginia National Bankshares shares are held by institutional investors. Comparatively, 88.8% of Hanmi Financial shares are held by institutional investors. 12.3% of Virginia National Bankshares shares are held by company insiders. Comparatively, 1.4% of Hanmi Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Virginia National Bankshares has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500. Comparatively, Hanmi Financial has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Virginia National Bankshares and Hanmi Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Virginia National Bankshares	0	0	0	0	N/A
Hanmi Financial	0	1	2	0	2.67

Hanmi Financial has a consensus price target of $24.00, suggesting a potential upside of 63.27%. Given Hanmi Financial’s higher probable upside, analysts clearly believe Hanmi Financial is more favorable than Virginia National Bankshares.

Dividends

Virginia National Bankshares pays an annual dividend of $1.32 per share and has a dividend yield of 4.6%. Hanmi Financial pays an annual dividend of $1.00 per share and has a dividend yield of 6.8%. Virginia National Bankshares pays out 29.1% of its earnings in the form of a dividend. Hanmi Financial pays out 29.8% 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.

About Virginia National Bankshares

(Get Rating)

Virginia National Bankshares Corp. is a bank holding company engaged in the provision of banking and related financial services. It operates through the following segments: Bank, VNB Trust and Estate Services, Sturman Wealth Advisors, and Masonry Capital. The Bank segment includes making loans, taking deposits, and offering related services to individuals, businesses, and charitable organizations. The VNB Trust and Estate Services segment consists of corporate trustee services, trust and estate administration, IRA administration and custody services, and in-house investment management services. The Sturman Wealth Advisors segment offers wealth and investment advisory services. The Masonry Capital segment refers to the investment management services for separately managed accounts and a private investment fund. The company was founded in 1998 and is headquartered in Charlottesville, VA.

About Hanmi Financial

(Get Rating)

Hanmi Financial Corp. is a holding company, which engages in the provision of commercial banking and financial services. It offers checking, money market and savings, treasury management, and loans. The company was founded in 1982 and is headquartered in Los Angeles, CA.