Head-To-Head Comparison: Malaga Financial (OTCMKTS:MLGF) versus Hope Bancorp (NASDAQ:HOPE)

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Malaga Financial and Hope Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Malaga Financial	0	0	0	0	0.00
Hope Bancorp	1	2	1	0	2.00

Hope Bancorp has a consensus price target of $13.75, suggesting a potential upside of 21.57%. Given Hope Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Hope Bancorp is more favorable than Malaga Financial.

Dividends

Malaga Financial pays an annual dividend of $1.00 per share and has a dividend yield of 4.5%. Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 5.0%. Malaga Financial pays out 45.9% of its earnings in the form of a dividend. Hope Bancorp pays out 121.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Malaga Financial	N/A	N/A	N/A
Hope Bancorp	5.81%	5.09%	0.62%

Valuation & Earnings

This table compares Malaga Financial and Hope Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Malaga Financial	N/A	N/A	$21.55 million	$2.18	10.09
Hope Bancorp	$967.63 million	1.50	$61.59 million	$0.46	24.59

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

Insider and Institutional Ownership

1.2% of Malaga Financial shares are held by institutional investors. Comparatively, 84.0% of Hope Bancorp shares are held by institutional investors. 5.2% of Hope Bancorp shares are held by 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.

Risk & Volatility

Malaga Financial has a beta of 0.08, meaning that its share price is 92% less volatile than the S&P 500. Comparatively, Hope Bancorp has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Summary

Hope Bancorp beats Malaga Financial on 13 of the 15 factors compared between the two stocks.

About Malaga Financial

Malaga Financial Corporation operates as the holding company for Malaga Bank that provides various community banking products and services to personal and business customers. It offers checking, savings, NOW, and money market accounts, certificates of deposits, business banking, consumer, and demand deposits. The company also provides commercial real estate, single and multi-family residential mortgage, consumer, 14-unit investment property, construction, personal, and business loans; home equity lines of credit; and certificates of deposit. In addition, it offers coupon redemption, direct deposit, overdraft lines of credit, telephone transfers, U.S. savings bond redemption, and wire transfer services; and ATM and VISA debit cards, bank by mail, medallion signature guarantee, night depository, notary, safe deposit boxes, and trust deed note collection services. Further, the company provides online banking services, including bill payer, e-statements, and mobile banking services. The company was incorporated in 2002 and is headquartered in Palos Verdes Estates, 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.