Hope Bancorp (NASDAQ: HOPE) and Trustmark Corporation (NASDAQ:TRMK) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Dividends

Hope Bancorp pays an annual dividend of $0.52 per share and has a dividend yield of 3.0%. Trustmark Corporation pays an annual dividend of $0.92 per share and has a dividend yield of 2.9%. Hope Bancorp pays out 43.3% of its earnings in the form of a dividend. Trustmark Corporation pays out 52.6% 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. Hope Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Hope Bancorp and Trustmark Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hope Bancorp 0 5 1 0 2.17
Trustmark Corporation 0 4 0 0 2.00

Hope Bancorp presently has a consensus price target of $19.30, suggesting a potential upside of 12.54%. Trustmark Corporation has a consensus price target of $34.50, suggesting a potential upside of 9.18%. Given Hope Bancorp’s stronger consensus rating and higher probable upside, equities analysts clearly believe Hope Bancorp is more favorable than Trustmark Corporation.

Risk and Volatility

Hope Bancorp has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, Trustmark Corporation has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Hope Bancorp 26.16% 8.74% 1.21%
Trustmark Corporation 18.56% 8.21% 0.93%

Earnings and Valuation

This table compares Hope Bancorp and Trustmark Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Hope Bancorp $473.75 million 4.91 $113.74 million $1.20 14.29
Trustmark Corporation $604.36 million 3.54 $108.41 million $1.75 18.06

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

Insider & Institutional Ownership

77.0% of Hope Bancorp shares are held by institutional investors. Comparatively, 62.3% of Trustmark Corporation shares are held by institutional investors. 5.2% of Hope Bancorp shares are held by insiders. Comparatively, 1.4% of Trustmark Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Hope Bancorp beats Trustmark Corporation on 13 of the 16 factors compared between the two stocks.

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).

About Trustmark Corporation

Trustmark Corporation is a bank holding company. The Company’s principal subsidiary is Trustmark National Bank (TNB). Through TNB and its subsidiaries, the Company operates as a financial services company providing banking and other financial solutions. It operates through three segments: General Banking, Wealth Management and Insurance. The General Banking Division is responsible for all traditional banking products and services, including loans and deposits. The Wealth Management Division provides customized solutions for customers by integrating financial services with traditional banking products and services, such as money management, full-service brokerage, financial planning, personal and institutional trust and retirement services. Through Fisher Brown Bottrell Insurance, Inc. (FBBI), a subsidiary of TNB, the Insurance Division provides a range of retail insurance products, including commercial risk management products, bonding, group benefits and personal lines coverage.

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