Head to Head Contrast: Carolina Financial (CARO) vs. Equity BancShares (EQBK)

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

Analyst Ratings

This is a breakdown of recent ratings and target prices 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 target price of $41.40, suggesting a potential upside of 6.70%. Equity BancShares has a consensus target price of $33.00, suggesting a potential downside of 7.64%. Given Carolina Financial’s stronger consensus rating and higher probable upside, equities analysts clearly believe Carolina Financial is more favorable than Equity BancShares.

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 11.5% of its earnings in the form of a dividend.

Institutional and Insider Ownership

34.6% of Carolina Financial shares are held by institutional investors. Comparatively, 51.4% 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 large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Carolina Financial has a beta of 0.36, meaning that its share price is 64% less volatile than the S&P 500. Comparatively, Equity BancShares has a beta of 0.88, meaning 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%

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Carolina Financial $129.00 million 6.32 $28.57 million $1.74 22.30
Equity BancShares $118.13 million 4.42 $20.65 million $1.63 21.92

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.

Summary

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

Carolina Financial Company Profile

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.

Equity BancShares Company Profile

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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