Hope Bancorp (NASDAQ: HOPE) and HopFed Bancorp (NASDAQ:HFBC) are both financials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Earnings & Valuation

This table compares Hope Bancorp and HopFed Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hope Bancorp $473.75 million 5.40 $113.74 million $1.19 15.86
HopFed Bancorp $39.66 million 2.58 $2.90 million $0.74 20.74

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

Dividends

Hope Bancorp pays an annual dividend of $0.52 per share and has a dividend yield of 2.8%. HopFed Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.3%. Hope Bancorp pays out 43.7% of its earnings in the form of a dividend. HopFed Bancorp pays out 27.0% 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.

Insider & Institutional Ownership

80.6% of Hope Bancorp shares are held by institutional investors. Comparatively, 46.6% of HopFed Bancorp shares are held by institutional investors. 5.2% of Hope Bancorp shares are held by insiders. Comparatively, 4.3% of HopFed Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Hope Bancorp has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500. Comparatively, HopFed Bancorp has a beta of 0.17, suggesting that its share price is 83% less volatile than the S&P 500.

Profitability

This table compares Hope Bancorp and HopFed Bancorp’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%
HopFed Bancorp 11.09% 5.21% 0.51%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Hope Bancorp and HopFed Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hope Bancorp 0 5 1 0 2.17
HopFed Bancorp 0 0 0 0 N/A

Hope Bancorp currently has a consensus price target of $19.70, suggesting a potential upside of 4.40%. Given Hope Bancorp’s higher possible upside, analysts plainly believe Hope Bancorp is more favorable than HopFed Bancorp.

Summary

Hope Bancorp beats HopFed Bancorp on 13 of the 15 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 HopFed Bancorp

HopFed Bancorp, Inc. is a savings and loan holding company that operates through its subsidiary, Heritage Bank USA, Inc. (the Bank). The Bank is a Kentucky state chartered commercial bank based in Hopkinsville, Kentucky, with branch offices in Kentucky and Tennessee. The business of the Bank primarily consists of attracting deposits from the general public and investing such deposits in loans secured by single family residential real estate and investment securities, including United States Government and agency securities, municipal and corporate bonds, collateralized mortgages obligations (CMOs), and mortgage-backed securities. The Bank also originates single-family residential/construction loans, and multi-family and commercial real estate loans, as well as loans secured by deposits, other consumer loans and commercial loans.

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