Hanmi Financial (NASDAQ:HAFC – Get Free Report) and Capital Bancorp (NASDAQ:CBNK – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.
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 hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Volatility and Risk
Hanmi Financial has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Capital Bancorp has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.
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% | 13.63% | 1.49% |
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 increased its dividend for 1 consecutive years and Capital Bancorp has increased 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 | 2.20 | $76.09 million | $3.04 | 10.87 |
| Capital Bancorp | $310.06 million | 2.24 | $57.17 million | $3.31 | 12.88 |
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 and price targets for Hanmi Financial and Capital Bancorp, as provided 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 currently has a consensus target price of $33.40, indicating a potential upside of 1.09%. Capital Bancorp has a consensus target price of $41.00, indicating a potential downside of 3.82%. Given Hanmi Financial’s stronger consensus rating and higher probable upside, research analysts plainly believe Hanmi Financial is more favorable than Capital Bancorp.
Summary
Hanmi Financial beats Capital Bancorp on 9 of the 17 factors compared between the two stocks.
About Hanmi Financial
Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides business banking products and services in the United States. It offers various deposit products, including noninterest-bearing checking accounts, savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. The company 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; and international finance and trade services and products, such as letters of credit, and import and export financing. In addition, it offers 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. The company was founded in 1982 and is headquartered in Los Angeles, California.
About Capital Bancorp
Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.
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