Equity Bancshares (NASDAQ:EQBK – Get Free Report) and Veritex (NASDAQ:VBTX – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.
Risk and Volatility
Equity Bancshares has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, Veritex has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500.
Dividends
Equity Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 1.3%. Veritex pays an annual dividend of $0.80 per share and has a dividend yield of 3.7%. Equity Bancshares pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Veritex pays out 46.5% of its earnings in the form of a dividend. Veritex is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Equity Bancshares | $227.58 million | 2.42 | $7.82 million | $0.60 | 60.25 |
| Veritex | $745.98 million | 1.60 | $108.26 million | $1.72 | 12.69 |
Veritex has higher revenue and earnings than Equity Bancshares. Veritex 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 breakdown of recent recommendations and price targets for Equity Bancshares and Veritex, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Equity Bancshares | 0 | 3 | 1 | 0 | 2.25 |
| Veritex | 0 | 1 | 3 | 0 | 2.75 |
Equity Bancshares currently has a consensus target price of $39.00, indicating a potential upside of 8.24%. Veritex has a consensus target price of $27.50, indicating a potential upside of 26.03%. Given Veritex’s stronger consensus rating and higher probable upside, analysts clearly believe Veritex is more favorable than Equity Bancshares.
Institutional & Insider Ownership
71.8% of Equity Bancshares shares are owned by institutional investors. Comparatively, 88.3% of Veritex shares are owned by institutional investors. 8.0% of Equity Bancshares shares are owned by insiders. Comparatively, 4.6% of Veritex shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares Equity Bancshares and Veritex’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Equity Bancshares | 3.75% | 12.57% | 1.10% |
| Veritex | 11.52% | 7.97% | 0.97% |
Summary
Veritex beats Equity Bancshares on 11 of the 16 factors compared between the two stocks.
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, commercial lines of credit, working capital, term, equipment and aircraft financing, acquisition, expansion and development, borrowing base, real estate construction, homebuilder, agricultural, government guaranteed, and other loan products. The company's loan products also comprise 1 4 family residential mortgages, agriculture, consumer, residential real estate mortgage, and agricultural real estate and production loans. It also provides debit and credit cards; insurance brokerage; trust and wealth management; 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. It operates a network of branches in Arkansas, Kansas, Missouri, and Oklahoma. Equity Bancshares, Inc. was incorporated in 2002 and is headquartered in Wichita, Kansas.
About Veritex
Veritex Holdings, Inc. operates as the bank holding company for Veritex Community Bank that provides various commercial banking products and services to small and medium-sized businesses, and professionals. The company accepts deposit products include demand, savings, money market, and time accounts. Its loan products include commercial real estate and general commercial, mortgage warehouse loans, residential real estate, construction and land, farmland, paycheck protection program, 1-4 family residential, agricultural, multi-family residential, and consumer loans, as well as purchased receivables financing. The company also provides interest rate swap services; and a range of online banking solutions, such as access to account balances, online transfers, online bill payment and electronic delivery of customer statements, and ATMs, as well as mobile banking, mail, and personal appointment. In addition, it offers debit cards, night depository services, direct deposits, cashier's checks, and letters of credit; treasury management services, including balance reporting, transfers between accounts, wire transfer initiation, automated clearinghouse origination, and stop payments; and cash management deposit products and services consisting of lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts. The company operates full-service branches located in the Dallas-Fort Worth metroplex, and the Houston metropolitan area. Veritex Holdings, Inc. was incorporated in 2009 and is headquartered in Dallas, Texas.
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