Contrasting Bank of N.T. Butterfield & Son (NYSE:NTB) and Equity Bancshares (NYSE:EQBK)

Bank of N.T. Butterfield & Son (NYSE:NTB) and Equity Bancshares (NYSE:EQBK) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.

Earnings and Valuation

This table compares Bank of N.T. Butterfield & Son and Equity Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of N.T. Butterfield & Son	$800.02 million	3.05	$231.94 million	$5.69	10.24
Equity Bancshares	$367.98 million	2.63	$22.73 million	$1.67	28.09

Bank of N.T. Butterfield & Son has higher revenue and earnings than Equity Bancshares. Bank of N.T. Butterfield & Son 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 current ratings and price targets for Bank of N.T. Butterfield & Son and Equity Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of N.T. Butterfield & Son	0	3	0	1	2.50
Equity Bancshares	0	4	3	2	2.78

Bank of N.T. Butterfield & Son presently has a consensus price target of $65.50, suggesting a potential upside of 12.44%. Equity Bancshares has a consensus price target of $54.00, suggesting a potential upside of 15.10%. Given Equity Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe Equity Bancshares is more favorable than Bank of N.T. Butterfield & Son.

Dividends

Bank of N.T. Butterfield & Son pays an annual dividend of $2.00 per share and has a dividend yield of 3.4%. Equity Bancshares pays an annual dividend of $0.88 per share and has a dividend yield of 1.9%. Bank of N.T. Butterfield & Son pays out 35.1% of its earnings in the form of a dividend. Equity Bancshares pays out 52.7% 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. Equity Bancshares has raised its dividend for 3 consecutive years. Bank of N.T. Butterfield & Son is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Bank of N.T. Butterfield & Son and Equity Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of N.T. Butterfield & Son	29.34%	22.43%	1.79%
Equity Bancshares	8.26%	13.34%	1.46%

Volatility & Risk

Bank of N.T. Butterfield & Son has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, Equity Bancshares has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500.

Institutional and Insider Ownership

62.7% of Bank of N.T. Butterfield & Son shares are held by institutional investors. Comparatively, 71.8% of Equity Bancshares shares are held by institutional investors. 1.2% of Bank of N.T. Butterfield & Son shares are held by insiders. Comparatively, 14.5% of Equity Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

About Bank of N.T. Butterfield & Son

The Bank of N.T. Butterfield & Son Ltd. provides community banking and wealth management business. The firm operates through the following geographical segments: Bermuda, the Cayman Islands, Channel Islands and the UK, and Other. The Bermuda and Cayman segments offer retail banking and wealth management. The Channel Islands and the UK segment refers to the retail and corporate banking and wealth management. The Other segment includes operations in the jurisdictions of The Bahamas, Canada, Mauritius, Singapore and Switzerland. The company was founded in 1858 and is headquartered in Hamilton, Bermuda.

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.