Equity Bancshares (NYSE: EQBK) is navigating a competitive landscape in the “State Commercial Banks – Fed Reserve System” sector. As one of 20 public companies in this industry, it faces challenges in key performance indicators compared to its peers. A comparative analysis reveals notable differences in profitability, dividends, risk, and analyst outlook.
Profitability and Financial Performance
Equity Bancshares reported a net margin of 5.01%, which is significantly lower than the industry average of 7.23%. Additionally, its return on equity stands at 11.67%, while the average for its competitors is 6.94%. The return on assets for Equity Bancshares is 1.33%, compared to 0.79% for its peers. This data indicates that while Equity Bancshares shows resilience, it may be underperforming relative to its competitors in overall profitability.
Dividend Policy Comparison
Equity Bancshares offers an annual dividend of $0.72 per share, translating to a dividend yield of 1.6%. The company distributes 60.0% of its earnings as dividends. In contrast, the broader group of “State Commercial Banks – Fed Reserve System” companies boasts a higher average dividend yield of 2.3%, with a payout ratio of 67.3%. This suggests that Equity Bancshares may need to reassess its dividend policy to remain competitive.
Risk and Volatility Assessment
The beta of Equity Bancshares is 0.87, indicating that its stock price is 13% less volatile than the S&P 500. Conversely, the average beta for its peers is 1.01, suggesting that they experience slightly more volatility. This lower beta may appeal to risk-averse investors but could also limit potential upside in a rising market.
Valuation Metrics
When examining revenue and earnings, Equity Bancshares reported a gross revenue of $335.67 million and a net income of $62.62 million, resulting in a price-to-earnings ratio of 37.40. In comparison, competitors in the sector achieved a gross revenue of $826.72 million and a net income of $104.06 million, with a slightly higher price-to-earnings ratio of 37.62. The lower price-to-earnings ratio for Equity Bancshares suggests that it may be more affordable, potentially attracting value-focused investors.
Ownership and Analyst Recommendations
Institutional investors hold 71.8% of Equity Bancshares shares, closely aligning with the industry average of 72.2%. Insider ownership stands at 6.6%, slightly below the industry average of 6.7%. This strong institutional backing indicates confidence among larger investors regarding the company’s prospects.
Analyst ratings from MarketBeat reveal a mixed outlook for Equity Bancshares. Currently, there are no sell ratings, two hold ratings, and one buy rating, resulting in a rating score of 12.67. In comparison, its peers have received more favorable ratings, with a potential upside of 7.63% for the industry as a whole. This disparity suggests that analysts perceive less growth potential for Equity Bancshares compared to its competitors.
Conclusion
In summary, Equity Bancshares faces significant challenges in several key performance areas compared to its peers. It trails behind in profitability metrics, dividend yields, and analyst ratings, suggesting the need for strategic adjustments to enhance its market position. Established in 2002 and headquartered in Wichita, Kansas, Equity Bancshares operates a network of 69 branches across Arkansas, Kansas, Missouri, and Oklahoma, providing a range of banking and financial services to its clients. As the company looks to the future, addressing these performance gaps will be crucial for its long-term growth and competitiveness in the banking sector.
