Analyzing BANCORP 34 (OTCMKTS:BCTF) and OP Bancorp (NASDAQ:OPBK)

BANCORP 34 (OTCMKTS:BCTF) and OP Bancorp (NASDAQ:OPBK) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Risk and Volatility

BANCORP 34 has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500. Comparatively, OP Bancorp has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for BANCORP 34 and OP Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BANCORP 34	0	0	0	0	0.00
OP Bancorp	0	2	1	0	2.33

OP Bancorp has a consensus price target of $16.00, suggesting a potential upside of 16.96%. Given OP Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe OP Bancorp is more favorable than BANCORP 34.

Dividends

BANCORP 34 pays an annual dividend of $0.28 per share and has a dividend yield of 2.0%. OP Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 3.5%. BANCORP 34 pays out 32.6% of its earnings in the form of a dividend. OP Bancorp pays out 30.6% 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. OP Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares BANCORP 34 and OP Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BANCORP 34	$56.34 million	1.70	$1.69 million	$0.86	16.36
OP Bancorp	$91.75 million	2.22	$21.07 million	$1.57	8.71

OP Bancorp has higher revenue and earnings than BANCORP 34. OP Bancorp is trading at a lower price-to-earnings ratio than BANCORP 34, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

6.5% of BANCORP 34 shares are held by institutional investors. Comparatively, 53.6% of OP Bancorp shares are held by institutional investors. 7.4% of BANCORP 34 shares are held by company insiders. Comparatively, 20.4% of OP Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares BANCORP 34 and OP Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BANCORP 34	11.27%	4.26%	0.40%
OP Bancorp	14.42%	11.24%	0.95%

Summary

OP Bancorp beats BANCORP 34 on 15 of the 16 factors compared between the two stocks.

About BANCORP 34

Bancorp 34, Inc. operates as the holding company for Bank 34 that offers various banking products and services to individuals and businesses in the United States. It accepts various deposit products, such as savings accounts, checking accounts, money market accounts, demand and time deposits, NOW accounts, and individual retirement accounts, as well as certificates of deposit. The company also provides term, working capital, construction, USDA, small business administration, equipment, assisted living and skilled nursing, renewable energy and solar equipment, and commercial real estate loans; and small to medium size business and business acquisitions financing; lines of credit; multi-family finance; and employee stock ownership plans, HOA lending, and investor pools of single family rentals. In addition, it offers credit and debit cards; safe deposit boxes; treasury management products; and merchant card processing, cash management, e-banking, mobile and online banking, bill payment, and merchant capture services. The company operates through its network of full-service branches in Scottsdale and Arizona, as well as Alamogordo and Las Cruces, New Mexico. Bancorp 34, Inc. was founded in 1934 and is headquartered in Scottsdale, Arizona.

About OP Bancorp

OP Bancorp operates as the bank holding company for Open Bank that provides banking products and services in California. It offers demand, checking, savings, money market, and time deposit accounts, as well as certificates of deposit. The company also provides commercial real estate, small business administration, commercial and industrial business, single-family residential, term, consumer, and home mortgage loans; trade financing products; and letters of credit, and SWIFT and export advice. In addition, it offers debit and credit card, online transfer and bill payment, electronic delivery of customer statements, and mobile banking solutions for iPhone and Android phones, including remote check deposit with mobile bill pay; direct deposits, cashier's checks, person to person payments, wire transfers, and automated clearing house (ACH) services; and cash management services, including balance reporting, transfers between accounts, wire transfer initiation, ACH origination, and stop payment services, as well as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company operates full branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Gardena, Buena Park, and Santa Clara in California; and Carrollton, Texas; and operates loan production offices in Pleasanton, California; Atlanta, Georgia; Aurora, Colorado; and Lynnwood in Washington. The company was founded in 2005 and is headquartered in Los Angeles, California.