Critical Contrast: Banco Santander Chile (NYSE:BSAC) and OP Bancorp (NASDAQ:OPBK)

Banco Santander Chile (NYSE:BSAC) and OP Bancorp (NASDAQ:OPBK) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Earnings and Valuation

This table compares Banco Santander Chile and OP Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Santander Chile	$4.50 billion	3.37	$1.12 billion	$2.62	12.29
OP Bancorp	$166.66 million	1.35	$25.64 million	$1.93	7.78

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Banco Santander Chile and OP Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Santander Chile	1	4	3	1	2.44
OP Bancorp	0	2	2	0	2.50

Banco Santander Chile presently has a consensus price target of $35.20, suggesting a potential upside of 9.30%. OP Bancorp has a consensus price target of $17.75, suggesting a potential upside of 18.18%. Given OP Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe OP Bancorp is more favorable than Banco Santander Chile.

Institutional and Insider Ownership

6.4% of Banco Santander Chile shares are owned by institutional investors. Comparatively, 53.6% of OP Bancorp shares are owned by institutional investors. 9.6% of OP Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Banco Santander Chile has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, OP Bancorp has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.

Profitability

This table compares Banco Santander Chile and OP Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Santander Chile	27.04%	22.94%	1.70%
OP Bancorp	16.87%	12.59%	1.08%

Dividends

Banco Santander Chile pays an annual dividend of $1.10 per share and has a dividend yield of 3.4%. OP Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 3.7%. Banco Santander Chile pays out 42.0% of its earnings in the form of a dividend. OP Bancorp pays out 29.0% 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.

Summary

Banco Santander Chile beats OP Bancorp on 10 of the 17 factors compared between the two stocks.

About Banco Santander Chile

Banco Santander-Chile, together with its subsidiaries, provides commercial and retail banking services in Chile. It operates through Retail Banking, Middle-Market, Corporate Investment Banking, and Corporate Activities segments. The company offers debit and credit cards, checking accounts, and savings products; consumer, automobile, commercial, mortgage, and government-guaranteed loans; and Chilean peso and foreign currency-denominated loans to finance various commercial transactions, trade, foreign currency forward contracts, and credit lines, as well as mortgage financing services. It also provides mutual fund management, insurance and securities brokerage, foreign exchange services, financial leasing, financial consulting and advisory, investment management, foreign trade, leasing, factoring, treasury, and transactional services, as well as specialized services to finance residential projects. In addition, the company offers short-term financing and fundraising, and brokerage services, as well as derivatives, securitization, and other products; and manages capital allocations. It serves individuals, small to middle-sized entities, companies, and large corporations, as well as universities, government entities, and local and regional governments. The company was incorporated in 1977 and is headquartered in Santiago, Chile. Banco Santander-Chile operates as a subsidiary of Banco Santander, S.A.

About OP Bancorp

OP Bancorp operates as the bank holding company for Open Bank that provides banking products and services in California. It offers demand, checking, savings, money market, and time deposit accounts, as well as certificates of deposit. The company also provides commercial real estate, small business administration, commercial and industrial business, single-family residential, term, consumer, and home mortgage loans; trade financing products; and letters of credit, and SWIFT and export advice. In addition, it offers debit and credit card, online transfer and bill payment, electronic delivery of customer statements, and mobile banking solutions for iPhone and Android phones, including remote check deposit with mobile bill pay; direct deposits, cashier's checks, person to person payments, wire transfers, and automated clearing house (ACH) services; and cash management services, including balance reporting, transfers between accounts, wire transfer initiation, ACH origination, and stop payment services, as well as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company operates full branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Gardena, Buena Park, and Santa Clara in California; and Carrollton, Texas; and operates loan production offices in Pleasanton, California; Atlanta, Georgia; Aurora, Colorado; and Lynnwood in Washington. The company was founded in 2005 and is headquartered in Los Angeles, California.