Analyzing First National Bank Alaska (OTCMKTS:FBAK) and Cathay General Bancorp (NASDAQ:CATY)

First National Bank Alaska (OTCMKTS:FBAK) and Cathay General Bancorp (NASDAQ:CATY) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Insider & Institutional Ownership

75.0% of Cathay General Bancorp shares are owned by institutional investors. 4.9% of Cathay General Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares First National Bank Alaska and Cathay General Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First National Bank Alaska	$265.67 million	3.89	$77.54 million	$24.48	13.31
Cathay General Bancorp	$1.38 billion	2.67	$315.12 million	$4.54	12.17

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for First National Bank Alaska and Cathay General Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First National Bank Alaska	0	0	0	0	0.00
Cathay General Bancorp	0	3	2	0	2.40

Cathay General Bancorp has a consensus target price of $53.25, indicating a potential downside of 3.62%. Given Cathay General Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Cathay General Bancorp is more favorable than First National Bank Alaska.

Volatility and Risk

First National Bank Alaska has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500. Comparatively, Cathay General Bancorp has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Dividends

First National Bank Alaska pays an annual dividend of $16.00 per share and has a dividend yield of 4.9%. Cathay General Bancorp pays an annual dividend of $1.52 per share and has a dividend yield of 2.8%. First National Bank Alaska pays out 65.4% of its earnings in the form of a dividend. Cathay General Bancorp pays out 33.5% 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.

Profitability

This table compares First National Bank Alaska and Cathay General Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First National Bank Alaska	29.19%	13.62%	1.52%
Cathay General Bancorp	23.79%	11.45%	1.38%

Summary

Cathay General Bancorp beats First National Bank Alaska on 9 of the 16 factors compared between the two stocks.

About First National Bank Alaska

First National Bank Alaska, a commercial bank, provides various banking products and services for business, industry, and individual customers primarily in Alaska. The company offers savings and checking accounts; money market deposits; safe deposit services; certificates of deposit; individual retirement accounts; and personal, home equity, and construction loans, as well as loans for stability and growth. It also provides investment, treasury, trust, and wealth management services; and escrow and contract collection, and bankcard services. In addition, the company offers debit and credit cards, online and mobile banking, fraud prevention, and convenience banking services. First National Bank Alaska was founded in 1922 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.