Financial Review: Hawthorn Bancshares (NASDAQ:HWBK) and Hancock Whitney (NASDAQ:HWC)

Hancock Whitney (NASDAQ:HWC) and Hawthorn Bancshares (NASDAQ:HWBK) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Profitability

This table compares Hancock Whitney and Hawthorn Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hancock Whitney	21.81%	11.36%	1.41%
Hawthorn Bancshares	22.77%	15.15%	1.42%

Dividends

Hancock Whitney pays an annual dividend of $2.00 per share and has a dividend yield of 2.7%. Hawthorn Bancshares pays an annual dividend of $0.84 per share and has a dividend yield of 2.2%. Hancock Whitney pays out 39.2% of its earnings in the form of a dividend. Hawthorn Bancshares pays out 22.0% 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. Hancock Whitney has raised its dividend for 3 consecutive years and Hawthorn Bancshares has raised its dividend for 5 consecutive years.

Volatility & Risk

Hancock Whitney has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Hawthorn Bancshares has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Hancock Whitney and Hawthorn Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hancock Whitney	0	3	7	1	2.82
Hawthorn Bancshares	0	0	1	0	3.00

Hancock Whitney currently has a consensus target price of $84.22, indicating a potential upside of 14.04%. Given Hancock Whitney’s higher probable upside, research analysts plainly believe Hancock Whitney is more favorable than Hawthorn Bancshares.

Valuation & Earnings

This table compares Hancock Whitney and Hawthorn Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hancock Whitney	$2.02 billion	2.93	$486.07 million	$5.10	14.48
Hawthorn Bancshares	$111.97 million	2.35	$23.80 million	$3.82	9.99

Hancock Whitney has higher revenue and earnings than Hawthorn Bancshares. Hawthorn Bancshares is trading at a lower price-to-earnings ratio than Hancock Whitney, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

81.2% of Hancock Whitney shares are held by institutional investors. Comparatively, 30.7% of Hawthorn Bancshares shares are held by institutional investors. 0.9% of Hancock Whitney shares are held by company insiders. Comparatively, 22.9% of Hawthorn Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Hancock Whitney beats Hawthorn Bancshares on 11 of the 18 factors compared between the two stocks.

About Hancock Whitney

Hancock Whitney Corporation operates as the financial holding company for Hancock Whitney Bank that provides traditional and online banking services to commercial, small business, and retail customers. It offers various transaction and savings deposit products consisting of brokered deposits, time deposits, and money market accounts; treasury management services, secured and unsecured loan products including revolving credit facilities, and letters of credit and similar financial guarantees; and trust and investment management services to retirement plans, corporations, and individuals, and investment advisory and brokerage products. The company also provides commercial and industrial loans including real and non-real estate loans; construction and land development loans; and residential mortgages, as well as consumer loans. In addition, it offers commercial finance products to middle market and corporate clients, including leases and related structures; facilitates investments in new market tax credit activities and holding certain foreclosed assets; provides customers access to fixed annuity and life insurance products; and underwriting transactions products, as well as debt and mortgage-related securities. The company was founded in 1899 and is headquartered in Gulfport, Mississippi.

About Hawthorn Bancshares

Hawthorn Bancshares, Inc. operates as the bank holding company for Hawthorn Bank that provides various banking services in the United States. It accepts checking, savings, money market, individual retirement, and other time deposit accounts, as well as certificates of deposit. The company also offers commercial and industrial, single payment personal, installment, commercial and residential real estate, and consumer loans, as well as equipment, operating, and small business administration loans; and debit and credit cards. In addition, it provides trust services that include estate planning, investment, and asset management services; and cash management, safety deposit box, brokerage, and Internet banking services. Hawthorn Bancshares, Inc. was founded in 1865 and is headquartered in Jefferson City, Missouri.