Contrasting Equity Bancshares (NYSE:EQBK) & Mechanics Bancorp (NASDAQ:MCHB)

Equity Bancshares (NYSE:EQBK) and Mechanics Bancorp (NASDAQ:MCHB) are both financial services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.

Dividends

Equity Bancshares pays an annual dividend of $0.72 per share and has a dividend yield of 1.5%. Mechanics Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 5.7%. Equity Bancshares pays out 60.0% of its earnings in the form of a dividend. Mechanics Bancorp pays out -12.4% 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. Mechanics Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

71.8% of Equity Bancshares shares are held by institutional investors. Comparatively, 74.7% of Mechanics Bancorp shares are held by institutional investors. 6.6% of Equity Bancshares shares are held by company insiders. Comparatively, 4.6% of Mechanics Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Equity Bancshares has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Mechanics Bancorp has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500.

Profitability

This table compares Equity Bancshares and Mechanics Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equity Bancshares	5.01%	11.67%	1.33%
Mechanics Bancorp	-14.49%	4.74%	0.41%

Valuation and Earnings

This table compares Equity Bancshares and Mechanics Bancorp”s gross 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	2.66	$62.62 million	$1.20	39.02
Mechanics Bancorp	$358.19 million	9.10	-$144.34 million	($6.76)	-2.18

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

Analyst Recommendations

This is a summary of recent ratings for Equity Bancshares and Mechanics Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equity Bancshares	0	1	0	2	3.33
Mechanics Bancorp	0	2	0	0	2.00

Mechanics Bancorp has a consensus price target of $14.50, indicating a potential downside of 1.63%. Given Mechanics Bancorp’s higher possible upside, analysts clearly believe Mechanics Bancorp is more favorable than Equity Bancshares.

Summary

Equity Bancshares beats Mechanics Bancorp on 9 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 Mechanics Bancorp

HomeStreet, Inc. operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services primarily in the Western United States. The company offers personal and business checking, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit; credit cards; insurance; and treasury management products and services. Its loan products include commercial business and agriculture loans, single family residential mortgages, consumer loans, commercial loans secured by residential and commercial real estate, and construction loans for residential and commercial real estate development, as well as consumer installment loans and permanent loans on commercial real estate and single-family residences. In addition, the company offers its products and services through bank branches, loan production offices, and ATMs, as well as through online, mobile, and telephone banking. As of December 31, 2021, it operated 60 full-service bank branches located in Washington state, Northern and Southern California, the Portland, Oregon, and Hawaii; and five primary stand-alone commercial lending centers in Central Washington, Oregon, Southern California, Idaho, and Utah. HomeStreet, Inc. serves small and medium sized businesses, real estate investors, professional firms, and individuals. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was incorporated in 1921 and is headquartered in Seattle, Washington.