Contrasting West Bancorporation (NASDAQ:WTBA) & OP Bancorp (NASDAQ:OPBK)

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

Institutional and Insider Ownership

53.6% of OP Bancorp shares are owned by institutional investors. Comparatively, 44.3% of West Bancorporation shares are owned by institutional investors. 9.6% of OP Bancorp shares are owned by company insiders. Comparatively, 4.6% of West Bancorporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares OP Bancorp and West Bancorporation”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OP Bancorp	$166.66 million	1.34	$25.64 million	$2.00	7.50
West Bancorporation	$202.45 million	2.58	$32.56 million	$2.35	13.05

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OP Bancorp	17.09%	12.89%	1.11%
West Bancorporation	19.83%	16.09%	1.09%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for OP Bancorp and West Bancorporation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OP Bancorp	0	2	2	0	2.50
West Bancorporation	0	3	1	0	2.25

OP Bancorp presently has a consensus target price of $17.75, indicating a potential upside of 18.29%. West Bancorporation has a consensus target price of $29.00, indicating a potential downside of 5.46%. Given OP Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe OP Bancorp is more favorable than West Bancorporation.

Volatility & Risk

OP Bancorp has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, West Bancorporation has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Dividends

OP Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 3.7%. West Bancorporation pays an annual dividend of $1.04 per share and has a dividend yield of 3.4%. OP Bancorp pays out 28.0% of its earnings in the form of a dividend. West Bancorporation pays out 44.3% 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. OP Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

About OP Bancorp

OP Bancorp is the bank holding company for Open Bank, a community-focused financial institution headquartered in Los Angeles, California. Founded in 2005, Open Bank primarily serves small and middle-market businesses, entrepreneurs, professionals and individuals, with a particular focus on Korean American and other Asian American communities. Open Bank offers a range of banking products and services, including business and personal checking and savings accounts, certificates of deposit, commercial and residential real estate loans, commercial and industrial lending, small business loans and consumer financing.

About West Bancorporation

West Bancorporation, Inc. (NASDAQ: WTBA) is a bank holding company headquartered in West Des Moines, Iowa. It operates primarily through West Bank, a community banking institution that provides financial services to businesses, individuals and nonprofit organizations. West Bank offers commercial and consumer lending, including commercial real estate, business, residential real estate and personal loans. Its deposit products include checking, savings, money market and certificate of deposit accounts, while additional services include treasury management, online and mobile banking, cash management and trust or wealth management services.