Head-To-Head Contrast: Esquire Financial (NASDAQ:ESQ) & Franklin Financial Services (NASDAQ:FRAF)

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

Dividends

Esquire Financial pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Franklin Financial Services pays an annual dividend of $1.32 per share and has a dividend yield of 2.4%. Esquire Financial pays out 13.6% of its earnings in the form of a dividend. Franklin Financial Services pays out 27.8% 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 and Franklin Financial Services has raised its dividend for 1 consecutive years.

Analyst Ratings

This is a summary of recent ratings and target prices for Esquire Financial and Franklin Financial Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Esquire Financial	0	1	2	1	3.00
Franklin Financial Services	0	0	2	0	3.00

Esquire Financial presently has a consensus price target of $120.33, suggesting a potential upside of 8.27%. Franklin Financial Services has a consensus price target of $59.00, suggesting a potential upside of 9.04%. Given Franklin Financial Services’ higher possible upside, analysts plainly believe Franklin Financial Services is more favorable than Esquire Financial.

Valuation and Earnings

This table compares Esquire Financial and Franklin Financial Services”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	$164.50 million	5.84	$50.82 million	$5.88	18.90
Franklin Financial Services	$133.55 million	1.82	$21.23 million	$4.74	11.42

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

Insider & Institutional Ownership

54.7% of Esquire Financial shares are held by institutional investors. Comparatively, 24.8% of Franklin Financial Services shares are held by institutional investors. 18.0% of Esquire Financial shares are held by insiders. Comparatively, 6.9% of Franklin Financial Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Esquire Financial and Franklin Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Esquire Financial	30.90%	18.28%	2.31%
Franklin Financial Services	15.90%	13.06%	0.94%

Risk and Volatility

Esquire Financial has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, Franklin Financial Services has a beta of -0.1, meaning that its stock price is 110% less volatile than the S&P 500.

Summary

Esquire Financial beats Franklin Financial Services on 14 of the 16 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 Franklin Financial Services

Franklin Financial Services Corporation operates as the bank holding company for Farmers and Merchants Trust Company of Chambersburg that provides commercial, retail banking, and trust services to businesses, individuals, governmental entities, and non-profit organizations in Pennsylvania. It offers various deposit products, including checking, savings, money management, and time deposit accounts, as well as demand deposits. The company also provides commercial real estate, construction and land development, commercial and industrial, and residential mortgage loans, as well as installment and revolving loans; consumer loans comprising unsecured personal lines of credit and installment loans; and secured and unsecured commercial and industrial loans, including accounts receivable and inventory financing, and commercial equipment financing. In addition, it offers various investment and trust services comprising estate planning and administration, corporate and personal trust fund management, pension, and profit sharing and other employee benefit funds management services, and custodial services, as well as non-trust related investment services; sells mutual funds, annuities, and insurance products; and offers safe deposit, pension, and fiduciary services. Further, the company engages in non-bank investment activities, such as venture capital investments. The company was founded in 1906 and is headquartered in Chambersburg, Pennsylvania.