Critical Comparison: Columbia Banking System (NASDAQ:COLB) and Equity Bancshares (NASDAQ:EQBK)

Columbia Banking System (NASDAQ:COLB) and Equity Bancshares (NASDAQ:EQBK) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Dividends

Columbia Banking System pays an annual dividend of $1.44 per share and has a dividend yield of 6.0%. Equity Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 1.5%. Columbia Banking System pays out 61.0% of its earnings in the form of a dividend. Equity Bancshares pays out 15.3% 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. Columbia Banking System has raised its dividend for 4 consecutive years and Equity Bancshares has raised its dividend for 3 consecutive years. Columbia Banking System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Columbia Banking System and Equity Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Banking System	$1.95 billion	2.58	$533.67 million	$2.36	10.14
Equity Bancshares	$225.03 million	3.07	$62.62 million	$3.93	10.05

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

Profitability

This table compares Columbia Banking System and Equity Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Columbia Banking System	17.99%	11.21%	1.10%
Equity Bancshares	18.66%	14.64%	1.31%

Volatility and Risk

Columbia Banking System has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Equity Bancshares has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Columbia Banking System and Equity Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Banking System	0	9	4	0	2.31
Equity Bancshares	0	3	3	0	2.50

Columbia Banking System presently has a consensus price target of $29.85, indicating a potential upside of 24.72%. Equity Bancshares has a consensus price target of $46.60, indicating a potential upside of 17.97%. Given Columbia Banking System’s higher probable upside, equities analysts plainly believe Columbia Banking System is more favorable than Equity Bancshares.

Insider and Institutional Ownership

92.5% of Columbia Banking System shares are held by institutional investors. Comparatively, 71.8% of Equity Bancshares shares are held by institutional investors. 0.7% of Columbia Banking System shares are held by insiders. Comparatively, 6.6% of Equity Bancshares shares are held by 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

Equity Bancshares beats Columbia Banking System on 10 of the 17 factors compared between the two stocks.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.

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.