Contrasting Northwest Bancshares (NWBI) and Hanmi Financial Corp (HAFCD)

Northwest Bancshares (NASDAQ: NWBI) and Hanmi Financial Corp (NASDAQ:HAFCD) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, institutional ownership, dividends, profitabiliy, analyst recommendations, earnings and valuation.

Institutional & Insider Ownership

67.0% of Northwest Bancshares shares are held by institutional investors. 2.0% of Northwest Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Northwest Bancshares pays an annual dividend of $0.64 per share and has a dividend yield of 4.1%. Hanmi Financial Corp does not pay a dividend. Northwest Bancshares pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Northwest Bancshares and Hanmi Financial Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northwest Bancshares 11.30% 7.28% 0.89%
Hanmi Financial Corp N/A N/A N/A

Earnings and Valuation

This table compares Northwest Bancshares and Hanmi Financial Corp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Northwest Bancshares $387.26 million 4.16 $48.98 million $0.48 32.90
Hanmi Financial Corp N/A N/A N/A N/A N/A

Northwest Bancshares has higher revenue and earnings than Hanmi Financial Corp.

Analyst Recommendations

This is a breakdown of current ratings for Northwest Bancshares and Hanmi Financial Corp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northwest Bancshares 1 2 0 0 1.67
Hanmi Financial Corp 0 0 0 0 N/A

Northwest Bancshares presently has a consensus target price of $16.33, indicating a potential upside of 3.44%. Given Northwest Bancshares’ higher possible upside, equities research analysts plainly believe Northwest Bancshares is more favorable than Hanmi Financial Corp.

Summary

Northwest Bancshares beats Hanmi Financial Corp on 8 of the 9 factors compared between the two stocks.

About Northwest Bancshares

Northwest Bancshares, Inc. (Northwest) is a savings and loan holding company. The Company’s principal business consists of attracting deposits and making loans secured by various types of collateral, including real estate and other assets in the markets in which it operates. Its segments include Community Banking and Consumer Finance. The Community Banking segment includes its savings bank subsidiary, Northwest Bank, as well as the subsidiaries of the savings bank that provide similar products and services. The bank is a community-oriented institution that offers a range of personal and business deposit and loan products, including mortgage, consumer, and commercial loans, as well as trust, investment management, actuarial and benefit plan administration, and brokerage services typically offered by a full service financial institution. The Consumer Finance segment comprises Northwest Consumer Discount Company, a subsidiary of Northwest Bank.

About Hanmi Financial Corp

Hanmi Financial Corporation is the holding company for Hanmi Bank (the Bank). The Bank is a community bank conducting general business banking, with its primary market encompassing the Korean-American community, as well as other ethnic communities across California, Colorado, Georgia, Illinois, New York, Texas, Virginia and Washington. The Bank’s client base reflects the multi-ethnic composition of these communities. The Bank maintains a branch network of full-service branch offices in California, Illinois, New Jersey, New York, Texas and Virginia, and loan production offices in California, Colorado, Texas, Virginia and Washington State. Its lending activities include real estate loans (commercial property, construction and residential property), commercial and industrial loans (commercial term loans, commercial lines of credit and international), and consumer loans and small business administration (SBA) loans. Its revenues are derived from interest and fees on its loans.

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