Financial Review: Hanover Bancorp (NASDAQ:HNVR) versus Hawthorn Bancshares (NASDAQ:HWBK)

Hawthorn Bancshares (NASDAQ:HWBK) and Hanover Bancorp (NASDAQ:HNVR) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.

Dividends

Hawthorn Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 2.2%. Hanover Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. Hawthorn Bancshares pays out 25.1% of its earnings in the form of a dividend. Hanover Bancorp pays out 26.3% 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. Hawthorn Bancshares has raised its dividend for 5 consecutive years. Hawthorn Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

30.7% of Hawthorn Bancshares shares are owned by institutional investors. Comparatively, 15.0% of Hanover Bancorp shares are owned by institutional investors. 22.7% of Hawthorn Bancshares shares are owned by company insiders. Comparatively, 24.8% of Hanover Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Hawthorn Bancshares and Hanover Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hawthorn Bancshares	$109.67 million	2.24	$18.26 million	$3.19	11.15
Hanover Bancorp	$148.36 million	1.16	$12.35 million	$1.52	15.70

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

Risk & Volatility

Hawthorn Bancshares has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500. Comparatively, Hanover Bancorp has a beta of 0.04, suggesting that its stock price is 96% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hawthorn Bancshares	20.09%	14.22%	1.18%
Hanover Bancorp	7.82%	7.20%	0.60%

Analyst Recommendations

This is a summary of current recommendations for Hawthorn Bancshares and Hanover Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hawthorn Bancshares	0	1	0	0	2.00
Hanover Bancorp	0	3	2	0	2.40

Hanover Bancorp has a consensus price target of $24.50, indicating a potential upside of 2.68%. Given Hanover Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Hanover Bancorp is more favorable than Hawthorn Bancshares.

Summary

Hawthorn Bancshares beats Hanover Bancorp on 11 of the 17 factors compared between the two stocks.

About Hawthorn Bancshares

Hawthorn Bancshares, Inc. operates as the bank holding company for Hawthorn Bank that provides various banking services in the United States. It accepts checking, savings, money market, individual retirement, and other time deposit accounts, as well as certificates of deposit. The company also offers commercial and industrial, single payment personal, installment, commercial and residential real estate, and consumer loans, as well as equipment, operating, and small business administration loans; and debit and credit cards. In addition, it provides trust services that include estate planning, investment, and asset management services; and cash management, safety deposit box, brokerage, and Internet banking services. Hawthorn Bancshares, Inc. was founded in 1865 and is headquartered in Jefferson City, Missouri.

About Hanover Bancorp

Hanover Bancorp, Inc., a bank holding company for Hanover Community Bank, provides personal and business lending and deposit services to businesses, municipalities, and individuals in the New York metro area. The company offers checking, credit cards, debit cards, money market, savings, government and municipal banking, and professional services, as well as time deposits, including certificate of deposit and individual retirement accounts. It also provides business loans, commercial real estate financing, small business administration, lending directory services, and residential mortgage. In addition, the company offers cash management, online and mobile banking, merchant services, and digital solutions. Its banking offices are located in Nassau, Suffolk, Queens, Kings, New York Counties, New York, Monmouth County, Freehold, and New Jersey. The company was founded in 2008 and is headquartered in Mineola, New York.