Eagle Bancorp (NASDAQ:EGBN) & Esquire Financial (NASDAQ:ESQ) Critical Analysis

Esquire Financial (NASDAQ:ESQ) and Eagle Bancorp (NASDAQ:EGBN) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Insider and Institutional Ownership

54.7% of Esquire Financial shares are owned by institutional investors. Comparatively, 78.0% of Eagle Bancorp shares are owned by institutional investors. 18.0% of Esquire Financial shares are owned by company insiders. Comparatively, 3.4% of Eagle Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Esquire Financial pays an annual dividend of $0.70 per share and has a dividend yield of 0.7%. Eagle Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.2%. Esquire Financial pays out 12.3% of its earnings in the form of a dividend. Eagle Bancorp pays out -1.0% 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. Esquire Financial has raised its dividend for 4 consecutive years. Esquire Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Esquire Financial	31.26%	18.55%	2.36%
Eagle Bancorp	-18.65%	-10.07%	-1.10%

Analyst Ratings

This is a summary of current ratings and price targets for Esquire Financial and Eagle Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Esquire Financial	0	2	2	0	2.50
Eagle Bancorp	1	4	1	0	2.00

Esquire Financial presently has a consensus target price of $113.00, suggesting a potential upside of 10.71%. Eagle Bancorp has a consensus target price of $21.25, suggesting a potential downside of 0.79%. Given Esquire Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Esquire Financial is more favorable than Eagle Bancorp.

Risk & Volatility

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

Valuation and Earnings

This table compares Esquire Financial and Eagle Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Esquire Financial	$138.27 million	6.33	$43.66 million	$5.70	17.91
Eagle Bancorp	$707.50 million	0.92	-$47.03 million	($3.96)	-5.41

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

Summary

Esquire Financial beats Eagle Bancorp on 13 of the 17 factors compared between the two stocks.

About Esquire Financial

Esquire Financial Holdings, Inc. operates as the bank holding company for Esquire Bank, National Association that provides commercial banking products and services to legal industry and small businesses, and commercial and retail customers in the United States. The company offers checking, savings, money market, and time deposits, as well as certificates of deposit. It also provides commercial loans, such as short-term financing for inventory, receivables, the purchase of supplies, or other operating needs arising during the normal course of business, as well as loans to its qualified ISO customers; commercial lines of credit; consumer loans consisting of post-settlement consumer and structured settlement loans to plaintiffs and claimants, as well as loans to individuals for debt consolidation, medical expenses, living expenses, payment of outstanding bills, or other consumer needs; and real estate loans, such as multifamily, 1-4 family residential, commercial real estate, and construction loans, as well as merchant services. In addition, it offers cash management, cash sweep, online and mobile banking, individual retirement accounts, and working capital lines of credit. Esquire Financial Holdings, Inc. was founded in 2006 and is headquartered in Jericho, New York.

About Eagle Bancorp

Eagle Bancorp, Inc. operates as the bank holding company for EagleBank that provides commercial and consumer banking services primarily in the United States. The company also offers various commercial and consumer lending products comprising commercial loans for working capital, equipment purchases, real estate lines of credit, and government contract financing; asset based lending and accounts receivable financing; construction and commercial real estate loans; business equipment financing; consumer home equity lines of credit, personal lines of credit, and term loans; consumer installment loans, such as auto and personal loans; personal credit cards; and residential mortgage loans. In addition, it provides online and mobile banking services; checking and saving accounts; and other deposit services, including cash management services, business sweep accounts, lock boxes, remote deposit captures, account reconciliation services, merchant card services, safety deposit boxes, and automated clearing house origination, as well as after-hours depositories and ATM services. Further, the company offers insurance products and services through a referral program; and treasury management services. The company serves sole proprietors, small and medium-sized businesses, partnerships, corporations, and non-profit organizations and associations, as well as investors. Eagle Bancorp, Inc. was incorporated in 1997 and is headquartered in Bethesda, Maryland.