Equity Bancshares (NYSE:EQBK – Get Free Report) and Isabella Bank (NASDAQ:ISBA – Get Free Report) are both small-cap financial services companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.
Risk and Volatility
Equity Bancshares has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500. Comparatively, Isabella Bank has a beta of 0.12, meaning that its share price is 88% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and price targets for Equity Bancshares and Isabella Bank, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Equity Bancshares | 0 | 0 | 1 | 1 | 3.50 |
| Isabella Bank | 0 | 1 | 1 | 0 | 2.50 |
Profitability
This table compares Equity Bancshares and Isabella Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Equity Bancshares | 19.99% | 12.17% | 1.33% |
| Isabella Bank | 15.18% | 7.83% | 0.80% |
Valuation and Earnings
This table compares Equity Bancshares and Isabella Bank”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Equity Bancshares | $335.67 million | 2.31 | $62.62 million | $4.03 | 10.01 |
| Isabella Bank | $104.55 million | 2.48 | $13.89 million | $2.19 | 16.07 |
Equity Bancshares has higher revenue and earnings than Isabella Bank. Equity Bancshares is trading at a lower price-to-earnings ratio than Isabella Bank, indicating that it is currently the more affordable of the two stocks.
Dividends
Equity Bancshares pays an annual dividend of $0.72 per share and has a dividend yield of 1.8%. Isabella Bank pays an annual dividend of $1.12 per share and has a dividend yield of 3.2%. Equity Bancshares pays out 17.9% of its earnings in the form of a dividend. Isabella Bank pays out 51.1% 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.
Institutional and Insider Ownership
71.8% of Equity Bancshares shares are owned by institutional investors. 6.6% of Equity Bancshares shares are owned by insiders. Comparatively, 9.7% of Isabella Bank shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Summary
Equity Bancshares beats Isabella Bank on 11 of the 16 factors compared between the two stocks.
About Equity Bancshares
Equity Bancshares, Inc. operates as the bank holding company for Equity Bank that provides a range of banking, mortgage banking, and financial services to individual and corporate customers. The company accepts various demand, savings, money market, and time deposits. Its loan products include commercial and industrial, commercial real estate-backed, commercial lines of credit, working capital, term, equipment financing, acquisition, expansion and development, borrowing base, real estate construction, homebuilder, agricultural, government guaranteed, and other loan products to national and regional companies, restaurant franchisees, hoteliers, real estate developers, manufacturing and industrial companies, agribusiness companies, and other businesses. The company’s loan products also comprise various consumer loans to individuals and professionals, including residential real estate loans, home equity loans and lines of credit, installment loans, unsecured and secured personal lines of credit, overdraft protection, and letters of credit. It also provides debit cards; online banking solutions, such as access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions comprising remote check deposits with mobile bill pay; ATMs; and treasury management, wire transfer, automated clearing house, and stop payment services. In addition, the company offers cash management deposit products, such as lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts, as well as banking services through telephone, mail, and personal appointments. As of December 31, 2021, it operated a network of 69 branches in Arkansas, Kansas, Missouri, and Oklahoma. The company was founded in 2002 and is headquartered in Wichita, Kansas.
About Isabella Bank
Isabella Bank Corporation operates as the bank holding company for Isabella Bank that provides various banking products and services to businesses, institutions, and individuals and their families. Its deposit products include checking accounts, savings accounts, certificates of deposit, direct deposits, and money market accounts. The company’s loan portfolio comprises commercial, agricultural, and residential real estate loans, as well as consumer loans, including secured and unsecured personal loans. It also offers cash management, mobile and internet banking, electronic bill pay, automated teller machines, trust and investment, estate planning, and safe deposit box rental services; and group life, health, accident, disability, and other insurance products, as well as other employee benefit programs. As of December 31, 2021, the company operated 30 banking offices in Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw counties. Isabella Bank Corporation was founded in 1903 and is headquartered in Mount Pleasant, Michigan.
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