Critical Review: National Commerce Corporation (NCOM) & Hope Bancorp (HOPE)
National Commerce Corporation (NASDAQ: NCOM) and Hope Bancorp (NASDAQ:HOPE) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.
This table compares National Commerce Corporation and Hope Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|National Commerce Corporation||20.60%||7.68%||1.03%|
Insider & Institutional Ownership
47.2% of National Commerce Corporation shares are owned by institutional investors. Comparatively, 79.5% of Hope Bancorp shares are owned by institutional investors. 19.4% of National Commerce Corporation shares are owned by company insiders. Comparatively, 5.2% of Hope Bancorp shares are owned 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.
Earnings & Valuation
This table compares National Commerce Corporation and Hope Bancorp’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|National Commerce Corporation||$96.14 million||5.85||$25.33 million||$1.80||22.22|
|Hope Bancorp||$502.80 million||4.31||$147.53 million||$1.09||14.70|
Hope Bancorp has higher revenue and earnings than National Commerce Corporation. Hope Bancorp is trading at a lower price-to-earnings ratio than National Commerce Corporation, indicating that it is currently the more affordable of the two stocks.
Hope Bancorp pays an annual dividend of $0.52 per share and has a dividend yield of 3.2%. National Commerce Corporation does not pay a dividend. Hope Bancorp pays out 47.7% of its earnings in the form of a dividend.
This is a summary of current ratings and recommmendations for National Commerce Corporation and Hope Bancorp, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|National Commerce Corporation||0||4||0||0||2.00|
National Commerce Corporation currently has a consensus target price of $41.33, suggesting a potential upside of 3.33%. Hope Bancorp has a consensus target price of $19.67, suggesting a potential upside of 22.76%. Given Hope Bancorp’s higher possible upside, analysts clearly believe Hope Bancorp is more favorable than National Commerce Corporation.
Volatility & Risk
National Commerce Corporation has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Hope Bancorp has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500.
Hope Bancorp beats National Commerce Corporation on 9 of the 14 factors compared between the two stocks.
About National Commerce Corporation
National Commerce Corporation (NCC) is a financial holding company. The Company is engaged in the business of banking through its banking subsidiary, National Bank of Commerce (the Bank). The Company, through the Bank, provides a range of financial services to businesses, business owners and professionals. It holds interest in CBI Holding Company, LLC, which owns Corporate Billing, LLC, a transaction-based finance company that provides factoring, invoicing, collection and accounts receivable management services to transportation companies, and automotive parts and service providers across the United States and Canada. Its loan portfolio includes construction, land development and other land loans; loans secured by farmland; loans secured by one- to four-family residential properties; loans secured by multifamily residential properties; loans secured by nonfarm nonresidential properties; loans secured by real estate; commercial and industrial loans; consumer loans, and other loans.
About Hope Bancorp
Hope Bancorp, Inc., formerly BBCN Bancorp, Inc., is the holding company of Bank of Hope. Bank of Hope is the regional Korean-American bank in the United States. Bank of Hope operates approximately 85 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia and Alabama. The Bank also operates small business administration (SBA) loan production offices in Seattle, Denver, Dallas, Atlanta, Northern California, Annandale, Virginia, Portland, Oregon and Fremont, California; residential mortgage loan production offices in California, and a representative office in Seoul, Korea. Bank of Hope specializes in business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the Federal Deposit Insurance Corporation (FDIC).
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