Allegiance Bancshares (NASDAQ: ABTX) and Shinhan Financial Group (NYSE:SHG) are both financials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Institutional & Insider Ownership

41.3% of Allegiance Bancshares shares are owned by institutional investors. Comparatively, 2.3% of Shinhan Financial Group shares are owned by institutional investors. 13.9% of Allegiance Bancshares shares are owned by company insiders. Comparatively, 1.0% of Shinhan Financial Group shares are owned by company 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 Allegiance Bancshares and Shinhan Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allegiance Bancshares 10.49% 3.98% 0.43%
Shinhan Financial Group 21.39% 9.91% 0.78%

Analyst Ratings

This is a summary of current ratings and target prices for Allegiance Bancshares and Shinhan Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allegiance Bancshares 0 1 1 0 2.50
Shinhan Financial Group 0 0 0 0 N/A

Allegiance Bancshares currently has a consensus target price of $43.00, suggesting a potential upside of 10.68%. Given Allegiance Bancshares’ higher probable upside, analysts clearly believe Allegiance Bancshares is more favorable than Shinhan Financial Group.

Earnings & Valuation

This table compares Allegiance Bancshares and Shinhan Financial Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allegiance Bancshares $108.05 million 4.74 $22.85 million $1.51 25.73
Shinhan Financial Group $11.01 billion 2.12 $2.50 billion $6.49 7.57

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

About Allegiance Bancshares

Allegiance Bancshares, Inc. is a bank holding company. Through its subsidiary, Allegiance Bank (the Bank), the Company provides a range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses, professionals and individual customers. In addition to banking during normal business hours, the Company offers extended drive-in hours, automated teller machines (ATMs) and banking by telephone, mail and Internet. The Company also provides debit card services, cash management services and wire transfer services, and offers night depository, direct deposits, cashier’s checks, letters of credit and mobile deposits. It also offers safe deposit boxes, automated teller machines, drive-in services and round the clock depository facilities. The Company maintains an Internet banking Website that allows customers to obtain account balances and transfer funds among accounts.

About Shinhan Financial Group

Shinhan Financial Group Co., Ltd. (SFG) is a financial holding company. The Company operates through five segments: commercial banking services, which are provided by Shinhan Bank Co., Ltd. (Shinhan Bank); credit card services, which are provided by Shinhan Card Co., Ltd. (Shinhan Card); securities brokerage services, which are provided by Shinhan Investment Corp. (Shinhan Investment); life insurance services, which are provided by Shinhan Life Insurance Co., Ltd. (Shinhan Life Insurance), and other. The Company’s other services include leasing and equipment financing, regional banking services, savings banking services, loan collection and credit reporting, collective investment administrative services and financial system development services, as well as engaging in private equity investments through formation of private equity funds on a private placement basis. It also offers asset management services, including brokerage and trading of various securities.

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