NewtekOne (NASDAQ:NEWT) & Hawthorn Bancshares (NASDAQ:HWBK) Critical Survey

NewtekOne (NASDAQ:NEWT) and Hawthorn Bancshares (NASDAQ:HWBK) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, analyst recommendations, institutional ownership, risk and valuation.

Institutional and Insider Ownership

38.3% of NewtekOne shares are owned by institutional investors. Comparatively, 30.7% of Hawthorn Bancshares shares are owned by institutional investors. 6.5% of NewtekOne shares are owned by insiders. Comparatively, 23.4% of Hawthorn Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

NewtekOne has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500. Comparatively, Hawthorn Bancshares has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Earnings & Valuation

This table compares NewtekOne and Hawthorn Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewtekOne	$220.51 million	1.48	$47.33 million	$1.79	6.92
Hawthorn Bancshares	$60.47 million	3.28	$960,000.00	$0.90	31.50

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

Analyst Recommendations

This is a summary of recent ratings and target prices for NewtekOne and Hawthorn Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewtekOne	0	3	0	0	2.00
Hawthorn Bancshares	0	0	0	0	0.00

NewtekOne currently has a consensus target price of $14.67, suggesting a potential upside of 18.38%. Given NewtekOne’s stronger consensus rating and higher possible upside, analysts plainly believe NewtekOne is more favorable than Hawthorn Bancshares.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NewtekOne	14.92%	18.73%	2.95%
Hawthorn Bancshares	5.67%	4.46%	0.34%

Dividends

NewtekOne pays an annual dividend of $0.76 per share and has a dividend yield of 6.1%. Hawthorn Bancshares pays an annual dividend of $0.76 per share and has a dividend yield of 2.7%. NewtekOne pays out 42.5% of its earnings in the form of a dividend. Hawthorn Bancshares pays out 84.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NewtekOne is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

NewtekOne beats Hawthorn Bancshares on 12 of the 15 factors compared between the two stocks.

About NewtekOne

NewtekOne, Inc. operates as the bank holding company for Newtek Bank, National Association that engages in the provision of various business and financial solutions under the Newtek brand name to the small- and medium-sized business market. The company accepts demand, savings, NOW, money market, and time deposits; and provides loans including SBA loans, commercial and industrial loans, and commercial real estate loans. It is also involved in the provision of electronic payment processing services comprising credit and debit card processing services, check approval services, processing equipment, and software, as well as cloud-based Point of Sale systems for a various restaurant, retail, assisted living, taxi cabs, parks, and golf course businesses. In addition, it offers wholesale brokerage insurance agency services; and payroll management, and related payment and tax reporting services to independent business owners. Further, the company provides website hosting, dedicated server hosting, cloud hosting, web design and development, internet marketing, ecommerce, data storage, backup and disaster recovery, and other related services, including consulting and implementing technology solutions for enterprise and commercial clients as well as SMBs. The company was formerly known as Newtek Business Services Corp. and changed its name to NewtekOne, Inc. in January 2023. NewtekOne, Inc. was founded in 1998 and is headquartered in Boca Raton, Florida.

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.