Comparing SR Bancorp (NASDAQ:SRBK) & Esquire Financial (NASDAQ:ESQ)

SR Bancorp (NASDAQ:SRBK) and Esquire Financial (NASDAQ:ESQ) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and target prices for SR Bancorp and Esquire Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SR Bancorp	0	1	1	0	2.50
Esquire Financial	0	1	2	1	3.00

SR Bancorp currently has a consensus price target of $19.00, suggesting a potential downside of 2.21%. Esquire Financial has a consensus price target of $120.33, suggesting a potential upside of 4.90%. Given Esquire Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Esquire Financial is more favorable than SR Bancorp.

Insider and Institutional Ownership

24.7% of SR Bancorp shares are held by institutional investors. Comparatively, 54.7% of Esquire Financial shares are held by institutional investors. 7.8% of SR Bancorp shares are held by insiders. Comparatively, 13.9% of Esquire Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

SR Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.0%. Esquire Financial pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. SR Bancorp pays out 47.6% of its earnings in the form of a dividend. Esquire Financial pays out 13.4% 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. Esquire Financial has raised its dividend for 4 consecutive years.

Profitability

This table compares SR Bancorp and Esquire Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SR Bancorp	6.39%	1.41%	0.24%
Esquire Financial	29.96%	18.30%	2.30%

Volatility and Risk

SR Bancorp has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, Esquire Financial has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500.

Valuation and Earnings

This table compares SR Bancorp and Esquire Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SR Bancorp	$48.54 million	3.24	$5.14 million	$0.42	46.26
Esquire Financial	$164.50 million	6.02	$50.82 million	$5.95	19.28

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

Summary

Esquire Financial beats SR Bancorp on 15 of the 18 factors compared between the two stocks.

About SR Bancorp

SR Bancorp, Inc. operates as the holding company for Somerset Regal Bank that provides customary retail and commercial banking services to individuals, businesses, and local municipalities in the communities of Somerset, Middlesex, Hunterdon, and Essex counties in New Jersey. It offers deposit instruments, including noninterest-bearing demand deposits, interest-bearing demand accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides loans comprising one- to four family-residential mortgage loans, home equity loans and lines of credit, unsecured personal loans, and rehabilitation loans; and bill payment services. In addition, it is involved in the investment activities. The company was founded in 1887 and is headquartered in Bound Brook, New Jersey.

About Esquire Financial

Esquire Financial Holdings, Inc. operates as the bank holding company for Esquire Bank, National Association that provides commercial banking products and services to legal industry and small businesses, and commercial and retail customers in the United States. The company offers checking, savings, money market, and time deposits, as well as certificates of deposit. It also provides commercial loans, such as short-term financing for inventory, receivables, the purchase of supplies, or other operating needs arising during the normal course of business, as well as loans to its qualified ISO customers; commercial lines of credit; consumer loans consisting of post-settlement consumer and structured settlement loans to plaintiffs and claimants, as well as loans to individuals for debt consolidation, medical expenses, living expenses, payment of outstanding bills, or other consumer needs; and real estate loans, such as multifamily, 1-4 family residential, commercial real estate, and construction loans, as well as merchant services. In addition, it offers cash management, cash sweep, online and mobile banking, individual retirement accounts, and working capital lines of credit. Esquire Financial Holdings, Inc. was founded in 2006 and is headquartered in Jericho, New York.