Hanmi Financial (NASDAQ:HAFC) vs. Bay Commercial Bank (NASDAQ:BCML) Head to Head Contrast

Bay Commercial Bank (NASDAQ:BCML) and Hanmi Financial (NASDAQ:HAFC) 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, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.

Profitability

This table compares Bay Commercial Bank and Hanmi Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bay Commercial Bank	16.51%	7.07%	0.89%
Hanmi Financial	16.53%	9.59%	0.93%

Institutional & Insider Ownership

66.2% of Bay Commercial Bank shares are held by institutional investors. Comparatively, 88.7% of Hanmi Financial shares are held by institutional investors. 7.2% of Bay Commercial Bank shares are held by insiders. Comparatively, 1.9% of Hanmi Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Bay Commercial Bank pays an annual dividend of $1.00 per share and has a dividend yield of 3.7%. Hanmi Financial pays an annual dividend of $1.08 per share and has a dividend yield of 4.1%. Bay Commercial Bank pays out 47.6% of its earnings in the form of a dividend. Hanmi Financial pays out 45.2% 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. Bay Commercial Bank has raised its dividend for 3 consecutive years and Hanmi Financial has raised its dividend for 1 consecutive years. Hanmi Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Bay Commercial Bank has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, Hanmi Financial has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.

Valuation & Earnings

This table compares Bay Commercial Bank and Hanmi Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bay Commercial Bank	$138.09 million	2.16	$23.61 million	$2.10	12.98
Hanmi Financial	$259.79 million	3.06	$62.20 million	$2.39	11.05

Hanmi Financial has higher revenue and earnings than Bay Commercial Bank. Hanmi Financial is trading at a lower price-to-earnings ratio than Bay Commercial Bank, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Bay Commercial Bank and Hanmi Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bay Commercial Bank	0	1	2	0	2.67
Hanmi Financial	0	3	2	1	2.67

Bay Commercial Bank currently has a consensus target price of $31.50, suggesting a potential upside of 15.55%. Hanmi Financial has a consensus target price of $28.50, suggesting a potential upside of 7.95%. Given Bay Commercial Bank’s higher probable upside, research analysts plainly believe Bay Commercial Bank is more favorable than Hanmi Financial.

Summary

Hanmi Financial beats Bay Commercial Bank on 12 of the 16 factors compared between the two stocks.

About Bay Commercial Bank

BayCom Corp operates as the bank holding company for United Business Bank that provides various financial services to small and mid-sized businesses, service professionals, and individuals. The company provides demand, savings, money market, and time deposit accounts. It offers commercial and multifamily real estate loans, including owner-occupied and investor real estate loans; commercial and industrial loans, such as equipment loans and working capital lines of credit; small business administration loans; construction and land loans; agriculture-related loans; and consumer loans comprising installment loans, unsecured and secured personal lines of credit, and overdraft protection. In addition, the company provides online and mobile banking, automated teller machine, remote deposit capture, night depository, courier, direct deposit, treasury management, wire transfer, automated clearing house, debit cards, cashier's and travelers checks, letters of credit, lockbox, positive pay, reverse positive pay, and account reconciliation services, as well as zero balance accounts and sweep accounts, including loan sweep. It operates through a network of full-service banking branches in Northern and Southern California; Las Vegas, Nevada; Denver, Colorado; Custer, Delta, and Grand counties, Colorado; and Seattle, Washington and Central New Mexico. The company was formerly known as Bay Commercial Bank and changed its name to BayCom Corp in January 2017. BayCom Corp was incorporated in 2004 and is headquartered in Walnut Creek, California.

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.