Contrasting Hope Bancorp (NASDAQ:HOPE) and Eastern Bankshares (NASDAQ:EBC)

Eastern Bankshares (NASDAQ:EBC) and Hope Bancorp (NASDAQ:HOPE) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Eastern Bankshares and Hope Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eastern Bankshares	0	3	6	0	2.67
Hope Bancorp	0	3	3	0	2.50

Eastern Bankshares currently has a consensus price target of $24.86, suggesting a potential upside of 18.20%. Hope Bancorp has a consensus price target of $15.50, suggesting a potential upside of 16.72%. Given Eastern Bankshares’ stronger consensus rating and higher possible upside, research analysts plainly believe Eastern Bankshares is more favorable than Hope Bancorp.

Institutional and Insider Ownership

71.7% of Eastern Bankshares shares are held by institutional investors. Comparatively, 84.0% of Hope Bancorp shares are held by institutional investors. 1.3% of Eastern Bankshares shares are held by insiders. Comparatively, 2.3% of Hope Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Eastern Bankshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.9%. Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 4.2%. Eastern Bankshares pays out 34.1% of its earnings in the form of a dividend. Hope Bancorp pays out 56.0% 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. Eastern Bankshares has raised its dividend for 5 consecutive years.

Profitability

This table compares Eastern Bankshares and Hope Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eastern Bankshares	25.12%	8.71%	1.24%
Hope Bancorp	12.53%	5.71%	0.70%

Earnings & Valuation

This table compares Eastern Bankshares and Hope Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eastern Bankshares	$1.33 billion	3.62	$88.22 million	$1.76	11.95
Hope Bancorp	$967.63 million	1.75	$61.59 million	$1.00	13.28

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

Risk and Volatility

Eastern Bankshares has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500. Comparatively, Hope Bancorp has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Summary

Eastern Bankshares beats Hope Bancorp on 12 of the 17 factors compared between the two stocks.

About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.

About Hope Bancorp

Hope Bancorp, Inc. operates as the bank holding company for Bank of Hope that provides retail and commercial banking services for businesses and individuals in the United States. It accepts personal and business checking, money market, savings, time deposit, and individual retirement accounts. The company also offers loans comprising commercial and industrial loans to businesses for various purposes, such as working capital, purchasing inventory, debt refinancing, business acquisitions, international trade finance, other business-related financing, and loans syndication services; commercial real estate loans; residential mortgage loans; small business administration loans; and consumer loans, such as single-family mortgage, home equity, automobile, credit card, and personal loans. In addition, it provides internet banking and bill-pay, remote deposit capture, lock box, and ACH origination services; treasury management services; foreign currency exchange transactions; interest rate contracts and wealth management services; automated teller machine services; and engages in investment activities. Hope Bancorp, Inc. was founded in 1986 and is headquartered in Los Angeles, California.