Analyzing Red River Bancshares (NASDAQ:RRBI) & Shinhan Financial Group (NYSE:SHG)

Shinhan Financial Group (NYSE:SHG) and Red River Bancshares (NASDAQ:RRBI) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings for Shinhan Financial Group and Red River Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shinhan Financial Group	0	0	1	1	3.50
Red River Bancshares	0	3	1	0	2.25

Red River Bancshares has a consensus target price of $106.00, suggesting a potential upside of 2.44%. Given Red River Bancshares’ higher probable upside, analysts plainly believe Red River Bancshares is more favorable than Shinhan Financial Group.

Profitability

This table compares Shinhan Financial Group and Red River Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shinhan Financial Group	15.69%	8.63%	0.66%
Red River Bancshares	26.25%	12.47%	1.39%

Insider and Institutional Ownership

7.8% of Shinhan Financial Group shares are owned by institutional investors. Comparatively, 27.5% of Red River Bancshares shares are owned by institutional investors. 1.0% of Shinhan Financial Group shares are owned by insiders. Comparatively, 16.6% of Red River Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Shinhan Financial Group pays an annual dividend of $1.71 per share and has a dividend yield of 2.0%. Red River Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 1.0%. Shinhan Financial Group pays out 23.0% of its earnings in the form of a dividend. Red River Bancshares pays out 14.4% 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. Red River Bancshares has raised its dividend for 3 consecutive years.

Valuation and Earnings

This table compares Shinhan Financial Group and Red River Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shinhan Financial Group	$23.83 billion	1.65	$3.48 billion	$7.44	11.29
Red River Bancshares	$130.73 million	5.21	$42.76 million	$6.95	14.89

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

Risk and Volatility

Shinhan Financial Group has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Red River Bancshares has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500.

Summary

Red River Bancshares beats Shinhan Financial Group on 10 of the 17 factors compared between the two stocks.

About Shinhan Financial Group

Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; business expansion financing and consulting services; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers real estate trust, investment advisory, venture business investment, life and non-life insurance, trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. Additionally, it provides transaction history inquiries and fund transfers, opening letters of credit, trade finance, payment and collection management, sales and acquisition settlement, business-to-business settlement, sweeping, pooling, ERP interface, host-to-host banking, SWIFT SCORE, and cash and liquidity management service. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.

About Red River Bancshares

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.