Hope Bancorp (NASDAQ: HOPE) and Columbia Banking System (NASDAQ:COLB) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Analyst Ratings

This is a summary of current ratings and price targets for Hope Bancorp and Columbia Banking System, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hope Bancorp 0 4 1 0 2.20
Columbia Banking System 0 2 2 0 2.50

Hope Bancorp currently has a consensus target price of $19.40, suggesting a potential upside of 16.10%. Columbia Banking System has a consensus target price of $44.25, suggesting a potential upside of 10.57%. Given Hope Bancorp’s higher probable upside, analysts clearly believe Hope Bancorp is more favorable than Columbia Banking System.

Risk & Volatility

Hope Bancorp has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500. Comparatively, Columbia Banking System has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500.

Profitability

This table compares Hope Bancorp and Columbia Banking System’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hope Bancorp 24.38% 8.45% 1.17%
Columbia Banking System 25.82% 8.99% 1.20%

Insider and Institutional Ownership

79.4% of Hope Bancorp shares are held by institutional investors. Comparatively, 96.2% of Columbia Banking System shares are held by institutional investors. 5.2% of Hope Bancorp shares are held by insiders. Comparatively, 1.2% of Columbia Banking System shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Hope Bancorp pays an annual dividend of $0.52 per share and has a dividend yield of 3.1%. Columbia Banking System pays an annual dividend of $0.88 per share and has a dividend yield of 2.2%. Hope Bancorp pays out 47.7% of its earnings in the form of a dividend. Columbia Banking System pays out 44.7% 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.

Valuation and Earnings

This table compares Hope Bancorp and Columbia Banking System’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hope Bancorp $502.80 million 4.50 $147.53 million $1.09 15.33
Columbia Banking System $430.80 million 5.42 $115.01 million $1.97 20.31

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

Summary

Columbia Banking System beats Hope Bancorp on 10 of the 16 factors compared between the two stocks.

Hope Bancorp Company Profile

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).

Columbia Banking System Company Profile

Columbia Banking System, Inc. (Columbia) is a bank holding company for Columbia State Bank (the Bank) and Columbia Trust Company (Columbia Trust). The Company provides a range of banking services to small and medium-sized businesses, professionals and individuals. It offers products and services, which include Personal Banking, Business Banking and Wealth Management. Its Personal Banking products and services include Checking and Saving Accounts; Consumer Lending; Digital Banking; Residential Lending, and VISA Card Services. Its Business Banking products and services include Agricultural Lending; Commercial and Industrial Lending; International Banking; Merchant Card Services; Municipal Lending; Real Estate and Real Estate Construction Lending; Remote Deposit Capture; Small Business Administration (SBA) Lending; Small Business Services, and Treasury Management. Its Wealth Management products and services include Investment Services, Private Banking and Professional Banking.

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