Northrim BanCorp (NASDAQ:NRIM) versus Cathay General Bancorp (NASDAQ:CATY) Financial Comparison

Northrim BanCorp (NASDAQ:NRIM) and Cathay General Bancorp (NASDAQ:CATY) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Earnings and Valuation

This table compares Northrim BanCorp and Cathay General Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northrim BanCorp	$195.96 million	3.00	$36.97 million	$2.81	9.46
Cathay General Bancorp	$1.39 billion	2.39	$285.98 million	$4.33	11.27

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

Dividends

Northrim BanCorp pays an annual dividend of $0.64 per share and has a dividend yield of 2.4%. Cathay General Bancorp pays an annual dividend of $1.36 per share and has a dividend yield of 2.8%. Northrim BanCorp pays out 22.8% of its earnings in the form of a dividend. Cathay General Bancorp pays out 31.4% 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. Northrim BanCorp has increased its dividend for 16 consecutive years.

Profitability

This table compares Northrim BanCorp and Cathay General Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northrim BanCorp	25.32%	18.12%	1.64%
Cathay General Bancorp	22.26%	10.60%	1.30%

Volatility & Risk

Northrim BanCorp has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, Cathay General Bancorp has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.

Institutional & Insider Ownership

66.0% of Northrim BanCorp shares are held by institutional investors. Comparatively, 75.0% of Cathay General Bancorp shares are held by institutional investors. 3.9% of Northrim BanCorp shares are held by company insiders. Comparatively, 4.8% of Cathay General Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for Northrim BanCorp and Cathay General Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northrim BanCorp	0	0	2	1	3.33
Cathay General Bancorp	1	3	2	0	2.17

Northrim BanCorp presently has a consensus price target of $33.00, indicating a potential upside of 24.11%. Cathay General Bancorp has a consensus price target of $50.60, indicating a potential upside of 3.69%. Given Northrim BanCorp’s stronger consensus rating and higher probable upside, analysts clearly believe Northrim BanCorp is more favorable than Cathay General Bancorp.

Summary

Northrim BanCorp beats Cathay General Bancorp on 10 of the 17 factors compared between the two stocks.

About Northrim BanCorp

Northrim BanCorp, Inc. operates as the bank holding company for Northrim Bank that provides commercial banking products and services to businesses and professional individuals. It operates through two segments, Community Banking and Home Mortgage Lending. The company offers noninterest-bearing checking accounts and interest-bearing time deposits, checking and savings accounts, individual retirement and money market deposit accounts, certificates of deposit, and business sweep accounts. It also provides short and medium-term commercial loans, commercial credit lines, construction and real estate loans, and consumer loans, as well as short-term working capital. In addition, the company offers other services comprising consumer and business online banking, mobile app, and mobile deposits; and debit and credit cards. Further, it provides mobile web and app banking, consumer online account opening, personal finance, online documents, consumer debit cards, business debit cards, my rewards for consumer debit cards, retail lockbox, card control, corporate purchase cards, integrated payables, home equity advantage access cards, telebanking, and automated teller services. Additionally, the company offers personalized checks at account opening, overdraft protection from a savings account, commercial drive-up banking, automatic transfer and payment, People Pay, external transfer, Bill Pay, wire transfer, direct payroll deposit, electronic tax payment, Automated Clearing House origination and receipt, remote deposit capture, account reconciliation and positive pay, merchant, cash management, annuity, and long-term investment portfolio products and services. It also provides investment advisory, trust, wealth management, factoring, and mortgage services. The company was founded in 1990 and is headquartered in Anchorage, Alaska.

About Cathay General Bancorp

Cathay General Bancorp operates as the holding company for Cathay Bank that offers various commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States. The company offers various deposit products, including passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits. It also provides loan products, such as commercial mortgage loans, commercial loans, small business administration loans, residential mortgage loans, real estate construction loans, and home equity lines of credit, as well as installment loans to individuals for household, and other consumer expenditures. In addition, the company offers trade financing, letter of credit, wire transfer, forward currency spot and forward contract, safe deposit, collection, automatic teller machine, Internet banking, investment, and other customary bank services, as well as securities and insurance products. Cathay General Bancorp was founded in 1962 and is headquartered in Los Angeles, California.