Head to Head Comparison: Hanmi Financial (NASDAQ:HAFC) and UBS Group (NYSE:UBS)

Hanmi Financial (NASDAQ:HAFC) and UBS Group (NYSE:UBS) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.

Analyst Ratings

This is a breakdown of current recommendations for Hanmi Financial and UBS Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hanmi Financial	0	3	0	0	2.00
UBS Group	0	3	3	0	2.50

Hanmi Financial presently has a consensus target price of $20.33, indicating a potential upside of 7.41%. Given Hanmi Financial’s higher probable upside, research analysts plainly believe Hanmi Financial is more favorable than UBS Group.

Volatility & Risk

Hanmi Financial has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, UBS Group has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.

Valuation and Earnings

This table compares Hanmi Financial and UBS Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hanmi Financial	$403.51 million	1.42	$80.04 million	$2.40	7.89
UBS Group	$65.28 billion	1.45	$27.85 billion	$9.18	3.22

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

Insider & Institutional Ownership

88.7% of Hanmi Financial shares are held by institutional investors. 1.6% of Hanmi Financial shares are held by insiders. Comparatively, 1.0% of UBS Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hanmi Financial	15.84%	9.66%	0.89%
UBS Group	2.31%	2.14%	0.11%

Dividends

Hanmi Financial pays an annual dividend of $1.00 per share and has a dividend yield of 5.3%. UBS Group pays an annual dividend of $0.23 per share and has a dividend yield of 0.8%. Hanmi Financial pays out 41.7% of its earnings in the form of a dividend. UBS Group pays out 2.5% 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.

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.

About UBS Group

UBS Group AG provides financial advice and solutions to private, institutional, and corporate clients worldwide. It operates through five divisions: Global Wealth Management, Personal & Corporate Banking, Asset Management, Investment Bank, and Non-core and Legacy. The company offers investment advice, estate and wealth planning, investing, corporate and banking, and investment management, as well as mortgage, securities-based, and structured lending solutions. It also provides personal banking products and services, such as deposits, credit and debit cards, and online and mobile banking, as well as lending, investments, retirement, and wealth management services; and corporate and institutional solutions, including equity and debt capital markets, syndicated and structured credit, private placements, leasing, traditional financing, and transaction banking solutions for payment and cash management services, trade and export finance, and global custody solutions. In addition, the company offers equities, fixed income, hedge funds, real estate and private markets, indexed and alternative beta strategies, asset allocation and currency investment strategies, customized multi-asset solutions, advisory and fiduciary services, and multi-manager hedge fund solutions and advisory services. Further, it advises clients on strategic business opportunities and helps them raise capital to fund their activities; enables its clients to buy, sell, and finance securities on capital markets and to manage their risks and liquidity; distributes, trades in, finances, and clears cash equities and equity-linked products; structures, originates, and distributes new equity and equity-linked issues; and originates, distributes, manages risk, and provides liquidity in foreign exchange, rates, credit and precious metals. The company was formerly known as UBS AG and changed its name to UBS Group AG in December 2014. UBS Group AG was founded in 1862 and is headquartered in Zurich, Switzerland.