Head to Head Comparison: East West Bancorp (NASDAQ:EWBC) versus Hope Bancorp (NASDAQ:HOPE)

East West Bancorp (NASDAQ:EWBC) and Hope Bancorp (NASDAQ:HOPE) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Risk and Volatility

East West Bancorp has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, Hope Bancorp has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.

Profitability

This table compares East West Bancorp and Hope Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
East West Bancorp	27.16%	15.55%	1.63%
Hope Bancorp	4.89%	4.70%	0.58%

Dividends

East West Bancorp pays an annual dividend of $2.40 per share and has a dividend yield of 2.4%. Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 5.3%. East West Bancorp pays out 26.5% of its earnings in the form of a dividend. Hope Bancorp pays out 143.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. East West Bancorp has raised its dividend for 8 consecutive years.

Valuation & Earnings

This table compares East West Bancorp and Hope Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
East West Bancorp	$2.81 billion	4.98	$1.17 billion	$9.07	11.18
Hope Bancorp	$470.12 million	2.89	$99.63 million	$0.39	27.22

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for East West Bancorp and Hope Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
East West Bancorp	1	5	10	1	2.65
Hope Bancorp	0	3	1	0	2.25

East West Bancorp currently has a consensus price target of $124.08, indicating a potential upside of 22.32%. Hope Bancorp has a consensus price target of $13.25, indicating a potential upside of 24.82%. Given Hope Bancorp’s higher probable upside, analysts clearly believe Hope Bancorp is more favorable than East West Bancorp.

Insider & Institutional Ownership

89.5% of East West Bancorp shares are held by institutional investors. Comparatively, 84.0% of Hope Bancorp shares are held by institutional investors. 1.0% of East West Bancorp shares are held by company insiders. Comparatively, 5.2% of Hope Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

East West Bancorp beats Hope Bancorp on 13 of the 18 factors compared between the two stocks.

About East West Bancorp

East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals in the United States. The company operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. It accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. The company’s loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction finance, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, loan syndication, and equipment financing, as well as financing services for clients to facilitate their business transactions between the United States and Asia. It also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. The company was founded in 1973 and is headquartered in Pasadena, California.

About Hope Bancorp

Hope Bancorp, Inc. operates as the bank holding company for Bank of Hope that provides retail and commercial banking services for businesses and individuals in the United States. It accepts personal and business checking, money market, savings, time deposit, and individual retirement accounts. The company also offers loans comprising commercial and industrial loans to businesses for various purposes, such as working capital, purchasing inventory, debt refinancing, business acquisitions, international trade finance, other business-related financing, and loans syndication services; commercial real estate loans; residential mortgage loans; small business administration loans; and consumer loans, such as single-family mortgage, home equity, automobile, credit card, and personal loans. In addition, it provides internet banking and bill-pay, remote deposit capture, lock box, and ACH origination services; treasury management services; foreign currency exchange transactions; interest rate contracts and wealth management services; automated teller machine services; and engages in investment activities. Hope Bancorp, Inc. was founded in 1986 and is headquartered in Los Angeles, California.