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

Institutional & Insider Ownership

78.0% of Enterprise Financial Services shares are held by institutional investors. Comparatively, 60.9% of Equity BancShares shares are held by institutional investors. 2.6% of Enterprise Financial Services shares are held by company insiders. Comparatively, 12.2% of Equity BancShares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Enterprise Financial Services 32.31% 14.71% 1.54%
Equity BancShares 19.76% 9.88% 1.15%

Dividends

Enterprise Financial Services pays an annual dividend of $0.52 per share and has a dividend yield of 1.2%. Equity BancShares does not pay a dividend. Enterprise Financial Services pays out 14.4% of its earnings in the form of a dividend. Enterprise Financial Services has raised its dividend for 4 consecutive years.

Earnings and Valuation

This table compares Enterprise Financial Services and Equity BancShares’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enterprise Financial Services $276.15 million 3.67 $89.22 million $3.61 12.16
Equity BancShares $181.28 million 2.85 $35.83 million $2.64 12.38

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

Risk & Volatility

Enterprise Financial Services has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, Equity BancShares has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Enterprise Financial Services and Equity BancShares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enterprise Financial Services 0 1 3 0 2.75
Equity BancShares 0 1 2 0 2.67

Enterprise Financial Services currently has a consensus price target of $57.33, suggesting a potential upside of 30.66%. Equity BancShares has a consensus price target of $45.33, suggesting a potential upside of 38.68%. Given Equity BancShares’ higher possible upside, analysts plainly believe Equity BancShares is more favorable than Enterprise Financial Services.

Summary

Enterprise Financial Services beats Equity BancShares on 13 of the 17 factors compared between the two stocks.

Enterprise Financial Services Company Profile

Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers. The company offers demand deposits, interest-bearing transaction accounts, money market accounts, and savings deposits, as well as certificates of deposit. Its loan portfolio comprises commercial and industrial, commercial real estate, real estate construction and development, residential real estate, and consumer loans. In addition, the company provides treasury management and international trade services; tax credit brokerage services consisting of the acquisition of tax credits and sale of these tax credits to clients; and financial and estate planning, investment management, trust, fiduciary, and financial advisory services to businesses, individuals, institutions, retirement plans, and non-profit organizations. As of December 31, 2017, it had 19 banking locations and 5 limited service facilities in the St. Louis metropolitan area; 7 banking locations in the Kansas City metropolitan area; and 2 banking locations in the Phoenix metropolitan area. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.

Equity BancShares Company Profile

Equity Bancshares, Inc. operates as a bank holding company for Equity Bank that provides a range of financial services primarily to businesses, business owners, and individuals. The company accepts various deposit products, including 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 loans, homebuilder, agricultural, government guaranteed, and other loans, as well as letters of credit 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, home equity 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, and 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 February 22, 2018, it operated 42 full-service branches located in Kansas, Missouri, Arkansas, and Oklahoma. Equity Bancshares, Inc. was founded in 2002 and is headquartered in Wichita, Kansas.

Receive News & Ratings for Enterprise Financial Services Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Enterprise Financial Services and related companies with MarketBeat.com's FREE daily email newsletter.