Hanmi Financial (NASDAQ:HAFC) versus Malaga Financial (OTCMKTS:MLGF) Head-To-Head Comparison

Malaga Financial (OTCMKTS:MLGF) and Hanmi Financial (NASDAQ:HAFC) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, dividends, valuation, earnings, analyst recommendations and profitability.

Risk & Volatility

Malaga Financial has a beta of 0.15, meaning that its share price is 85% less volatile than the S&P 500. Comparatively, Hanmi Financial has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Malaga Financial and Hanmi Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Malaga Financial	0	0	0	0	0.00
Hanmi Financial	0	2	2	1	2.80

Hanmi Financial has a consensus target price of $28.50, suggesting a potential upside of 9.74%. Given Hanmi Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Hanmi Financial is more favorable than Malaga Financial.

Dividends

Malaga Financial pays an annual dividend of $1.00 per share and has a dividend yield of 4.6%. Hanmi Financial pays an annual dividend of $1.08 per share and has a dividend yield of 4.2%. Malaga Financial pays out 43.5% of its earnings in the form of a dividend. Hanmi Financial pays out 45.2% 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. Hanmi Financial has raised its dividend for 1 consecutive years. Malaga Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Malaga Financial and Hanmi Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Malaga Financial	N/A	N/A	N/A
Hanmi Financial	16.53%	9.59%	0.93%

Institutional and Insider Ownership

1.1% of Malaga Financial shares are held by institutional investors. Comparatively, 88.7% of Hanmi Financial shares are held by institutional investors. 1.9% of Hanmi Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Malaga Financial and Hanmi Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Malaga Financial	N/A	N/A	$22.65 million	$2.30	9.54
Hanmi Financial	$259.79 million	2.99	$62.20 million	$2.39	10.87

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

Summary

Hanmi Financial beats Malaga Financial on 15 of the 17 factors compared between the two stocks.

About Malaga Financial

Malaga Financial Corporation operates as the holding company for Malaga Bank that provides various community banking products and services to personal and business customers. It offers checking, savings, NOW, and money market accounts, certificates of deposits, business banking, consumer, and demand deposits. The company also provides commercial real estate, single and multi-family residential mortgage, consumer, 14-unit investment property, construction, personal, and business loans; home equity lines of credit; and certificates of deposit. In addition, it offers coupon redemption, direct deposit, overdraft lines of credit, telephone transfers, U.S. savings bond redemption, and wire transfer services; and ATM and VISA debit cards, bank by mail, medallion signature guarantee, night depository, notary, safe deposit boxes, and trust deed note collection services. Further, the company provides online banking services, including bill payer, e-statements, and mobile banking services. The company was incorporated in 2002 and is headquartered in Palos Verdes Estates, California.

About Hanmi Financial

Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides business banking products and services in the United States. It offers various deposit products, including noninterest-bearing checking accounts, savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. The company also provides real estate loans, such as commercial property, construction, and residential property loans; and commercial and industrial loans, such as commercial term loans and commercial lines of credit; and international finance and trade services and products, such as letters of credit, and import and export financing. In addition, it offers small business administration loans for business purposes, which comprise owner-occupied commercial real estate, business acquisitions, start-ups, franchise financing, working capital, improvements and renovations, inventory and equipment, and debt-refinancing, as well as equipment lease financing. The company was founded in 1982 and is headquartered in Los Angeles, California.