Reviewing S&T Bancorp (NASDAQ:STBA) & Esquire Financial (NASDAQ:ESQ)

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

Institutional & Insider Ownership

65.2% of S&T Bancorp shares are held by institutional investors. Comparatively, 54.7% of Esquire Financial shares are held by institutional investors. 1.2% of S&T Bancorp shares are held by insiders. Comparatively, 18.0% of Esquire Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for S&T Bancorp and Esquire Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
S&T Bancorp	0	3	0	0	2.00
Esquire Financial	0	2	1	0	2.33

S&T Bancorp currently has a consensus target price of $42.00, indicating a potential upside of 7.12%. Esquire Financial has a consensus target price of $100.50, indicating a potential upside of 1.07%. Given S&T Bancorp’s higher possible upside, equities research analysts plainly believe S&T Bancorp is more favorable than Esquire Financial.

Risk & Volatility

S&T Bancorp has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Esquire Financial has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Valuation & Earnings

This table compares S&T Bancorp and Esquire Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
S&T Bancorp	$564.96 million	2.66	$131.26 million	$3.41	11.50
Esquire Financial	$138.27 million	6.14	$43.66 million	$5.42	18.35

S&T Bancorp has higher revenue and earnings than Esquire Financial. S&T 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.

Profitability

This table compares S&T Bancorp and Esquire Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
S&T Bancorp	23.39%	9.32%	1.35%
Esquire Financial	30.96%	18.87%	2.41%

Dividends

S&T Bancorp pays an annual dividend of $1.36 per share and has a dividend yield of 3.5%. Esquire Financial pays an annual dividend of $0.70 per share and has a dividend yield of 0.7%. S&T Bancorp pays out 39.9% of its earnings in the form of a dividend. Esquire Financial pays out 12.9% 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. S&T Bancorp has raised its dividend for 13 consecutive years and Esquire Financial has raised its dividend for 4 consecutive years. S&T Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Esquire Financial beats S&T Bancorp on 10 of the 17 factors compared between the two stocks.

About S&T Bancorp

S&T Bancorp, Inc. is a bank holding company, which engages in the provision of consumer, commercial, and small business banking services. It operates through the following segments: Commercial Real Estate, Commercial and Industrial, Commercial Construction, Business Banking, Consumer Real Estate, and Other Consumer. The Commercial Real Estate segment includes both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care. The Commercial and Industrial segment focuses on the companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. The Commercial Construction segment refers to the finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. The Business Banking segment is made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards. The Consumer Real Estate segment offers first and second liens such as 1-4 family residential mortgages, home equity loans and home equity lines of credit. The Other Consumer segment consists of individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. The company was founded on March 17, 1983 and is headquartered in Indiana, PA.

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.