Cathay General Bancorp (NASDAQ: ABCB) and Ameris Bancorp (NASDAQ:ABCB) are both mid-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, analyst recommendations, dividends and profitability.

Earnings & Valuation

This table compares Cathay General Bancorp and Ameris Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cathay General Bancorp $612.45 million 5.61 $176.04 million $2.46 17.17
Ameris Bancorp $398.80 million 5.60 $73.54 million $2.48 18.95

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

Volatility & Risk

Cathay General Bancorp has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, Ameris Bancorp has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Institutional and Insider Ownership

70.5% of Cathay General Bancorp shares are held by institutional investors. Comparatively, 78.4% of Ameris Bancorp shares are held by institutional investors. 4.9% of Cathay General Bancorp shares are held by company insiders. Comparatively, 3.1% of Ameris Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Cathay General Bancorp 31.65% 11.98% 1.51%
Ameris Bancorp 15.07% 10.84% 1.20%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Cathay General Bancorp and Ameris Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cathay General Bancorp 0 4 3 0 2.43
Ameris Bancorp 0 3 2 0 2.40

Cathay General Bancorp currently has a consensus target price of $47.36, indicating a potential upside of 12.09%. Ameris Bancorp has a consensus target price of $58.20, indicating a potential upside of 23.83%. Given Ameris Bancorp’s higher possible upside, analysts clearly believe Ameris Bancorp is more favorable than Cathay General Bancorp.

Dividends

Cathay General Bancorp pays an annual dividend of $0.96 per share and has a dividend yield of 2.3%. Ameris Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 0.9%. Cathay General Bancorp pays out 39.0% of its earnings in the form of a dividend. Ameris Bancorp pays out 16.1% 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. Cathay General Bancorp has raised its dividend for 5 consecutive years. Cathay General Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Cathay General Bancorp beats Ameris Bancorp on 12 of the 17 factors compared between the two stocks.

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 automobile, household, and other consumer expenditures. In addition, the company offers letter of credit, wire transfer, forward currency spot and forward contract, traveler's check, safe deposit, night deposit, social security payment deposit, collection, bank-by-mail, drive-up and walk-up window, automatic teller machine, Internet banking, trade financing, and other customary bank services, as well as securities and insurance products. As of February 28, 2018, it operated 41 branches in California; 12 branches in New York State; 3 branches in the Chicago, Illinois area; 3 branches in Washington State; 2 branches in Texas; and 1 each branch in Maryland, Massachusetts, Nevada, New Jersey, and Hong Kong, as well as 1 representative office in Taipei and Shanghai. The company was founded in 1962 and is headquartered in Los Angeles, California.

About Ameris Bancorp

Ameris Bancorp operates as the holding company for Ameris Bank that provides banking services to retail and commercial customers primarily in Georgia, Alabama, Florida, and South Carolina. The company operates through five segments: Banking Division, Retail Mortgage Division, Warehouse Lending Division, Small Business Administration Division, and Premium Finance Division. It offers commercial and retail checking accounts, regular interest-bearing savings accounts, money market accounts, individual retirement accounts, and certificates of deposit. The company also provides commercial real estate, residential real estate mortgage, agricultural, and commercial and industrial loans; consumer loans, including motor vehicle, home improvement, and home equity loans, as well as loans secured by savings accounts and small unsecured personal credit lines; and municipal and commercial insurance premium finance loans. It operates 97 domestic banking offices and 13 loan production offices. Ameris Bancorp was founded in 1971 and is headquartered in Moultrie, Georgia.

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