Head-To-Head Analysis: Westamerica Bancorporation (NASDAQ:WABC) and Hope Bancorp (NASDAQ:HOPE)

Hope Bancorp (NASDAQ:HOPE) and Westamerica Bancorporation (NASDAQ:WABC) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings for Hope Bancorp and Westamerica Bancorporation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hope Bancorp	0	2	1	0	2.33
Westamerica Bancorporation	0	3	0	0	2.00

Hope Bancorp presently has a consensus target price of $12.50, indicating a potential downside of 6.23%. Westamerica Bancorporation has a consensus target price of $57.00, indicating a potential upside of 1.93%. Given Westamerica Bancorporation’s higher probable upside, analysts clearly believe Westamerica Bancorporation is more favorable than Hope Bancorp.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hope Bancorp	$1.09 billion	1.47	$133.67 million	$0.84	15.87
Westamerica Bancorporation	$327.54 million	4.56	$161.77 million	$5.49	10.19

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hope Bancorp	9.81%	5.52%	0.65%
Westamerica Bancorporation	45.73%	17.67%	2.30%

Risk and Volatility

Hope Bancorp has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Westamerica Bancorporation has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Insider & Institutional Ownership

84.0% of Hope Bancorp shares are owned by institutional investors. Comparatively, 81.9% of Westamerica Bancorporation shares are owned by institutional investors. 5.3% of Hope Bancorp shares are owned by company insiders. Comparatively, 4.4% of Westamerica Bancorporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 4.2%. Westamerica Bancorporation pays an annual dividend of $1.76 per share and has a dividend yield of 3.1%. Hope Bancorp pays out 66.7% of its earnings in the form of a dividend. Westamerica Bancorporation pays out 32.1% 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. Westamerica Bancorporation has raised its dividend for 32 consecutive years.

Summary

Westamerica Bancorporation beats Hope Bancorp on 9 of the 17 factors compared between the two stocks.

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.

About Westamerica Bancorporation

Westamerica Bancorporation operates as a bank holding company for the Westamerica Bank that provides various banking products and services to individual and commercial customers. The company accepts various deposit products, including retail savings and checking accounts, as well as certificates of deposit. Its loan portfolio includes commercial, commercial and residential real estate, real estate construction, and consumer installment loans, as well as indirect automobile loans. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. The company was founded in 1884 and is headquartered in San Rafael, California.