Head-To-Head Comparison: Carolina Financial (CARO) & Equity BancShares (EQBK)

Carolina Financial (NASDAQ: CARO) and Equity BancShares (NASDAQ:EQBK) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Insider & Institutional Ownership

40.4% of Carolina Financial shares are held by institutional investors. Comparatively, 59.2% of Equity BancShares shares are held by institutional investors. 12.2% of Carolina Financial shares are held by company insiders. Comparatively, 14.9% of Equity BancShares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Carolina Financial and Equity BancShares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carolina Financial 0 1 4 0 2.80
Equity BancShares 0 1 3 0 2.75

Carolina Financial presently has a consensus price target of $41.40, suggesting a potential upside of 2.00%. Equity BancShares has a consensus price target of $33.00, suggesting a potential downside of 10.40%. Given Carolina Financial’s stronger consensus rating and higher probable upside, research analysts clearly believe Carolina Financial is more favorable than Equity BancShares.

Earnings and Valuation

This table compares Carolina Financial and Equity BancShares’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Carolina Financial $129.00 million 6.61 $28.57 million $1.75 23.19
Equity BancShares $118.13 million 4.55 $20.65 million $1.63 22.60

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

Dividends

Carolina Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Equity BancShares does not pay a dividend. Carolina Financial pays out 11.4% of its earnings in the form of a dividend.

Volatility and Risk

Carolina Financial has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Equity BancShares has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Profitability

This table compares Carolina Financial and Equity BancShares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carolina Financial 22.22% 12.15% 1.55%
Equity BancShares 17.48% 8.87% 1.05%

Summary

Carolina Financial beats Equity BancShares on 12 of the 16 factors compared between the two stocks.

About Carolina Financial

Carolina Financial Corporation is a bank holding company. The Company operates through CresCom Bank (the Bank), a state-chartered commercial bank. The Company operates through three segments: community banking, wholesale mortgage banking (mortgage banking) and other. The Company’s community banking segment provides traditional banking services offered through CresCom Bank. The Company’s mortgage banking segment provides mortgage loan origination and servicing offered through Crescent Mortgage Company (Crescent Mortgage). The other segment provides managerial and operational support to the other business segments through Carolina Services and Carolina Financial. CresCom Bank provides a range of commercial and retail banking financial services to meet the financial needs of its customers through its branch network in South Carolina and North Carolina.

About Equity BancShares

Equity Bancshares, Inc. is a bank holding company. The Company’s principal activity is the ownership and management of its subsidiary, Equity Bank (the Bank). The Bank provides a range of financial services primarily to businesses and business owners, as well as individuals through its network of over 30 branches located in Kansas and Missouri. The Company’s operations involve the delivery of loan and deposit products to its customers. The Company offers commercial banking products and other services, including lending activities, deposit products, and other products and services. It offers a suite of online banking solutions, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements and mobile banking solutions. In addition, the Company offers commercial treasury management services, wire transfer, automated clearing house (ACH) services and cash management deposit products.

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