Porter Bancorp (NASDAQ: PBIB) and Cathay General Bancorp (NASDAQ:CATY) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitabiliy, institutional ownership, earnings, risk, dividends and analyst recommendations.
Institutional and Insider Ownership
18.4% of Porter Bancorp shares are held by institutional investors. Comparatively, 68.1% of Cathay General Bancorp shares are held by institutional investors. 28.7% of Porter Bancorp shares are held by insiders. Comparatively, 5.8% of Cathay General 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.
This is a summary of current ratings and price targets for Porter Bancorp and Cathay General Bancorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cathay General Bancorp||0||2||1||0||2.33|
Cathay General Bancorp has a consensus price target of $39.33, suggesting a potential upside of 5.25%. Given Cathay General Bancorp’s higher probable upside, analysts plainly believe Cathay General Bancorp is more favorable than Porter Bancorp.
This table compares Porter Bancorp and Cathay General Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cathay General Bancorp||32.94%||9.83%||1.26%|
Earnings & Valuation
This table compares Porter Bancorp and Cathay General Bancorp’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Porter Bancorp||$36.05 million||1.33||-$2.10 million||($0.45)||-22.91|
|Cathay General Bancorp||$467.81 million||6.38||$178.03 million||$2.23||16.76|
Cathay General Bancorp has higher revenue and earnings than Porter Bancorp. Porter Bancorp is trading at a lower price-to-earnings ratio than Cathay General Bancorp, indicating that it is currently the more affordable of the two stocks.
Cathay General Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 2.2%. Porter Bancorp does not pay a dividend. Cathay General Bancorp pays out 37.7% of its earnings in the form of a dividend.
Volatility & Risk
Porter Bancorp has a beta of 1.72, meaning that its stock price is 72% more volatile than the S&P 500. Comparatively, Cathay General Bancorp has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.
Cathay General Bancorp beats Porter Bancorp on 11 of the 14 factors compared between the two stocks.
About Porter Bancorp
Porter Bancorp, Inc. is a bank holding company. The Company operates through its subsidiary, PBI Bank (the Bank). The Bank is a community bank with a range of commercial and personal banking products. It offers retail and commercial deposit products. It offers drive-in banking facilities, automatic teller machines, night depository, personalized checks, credit cards, debit cards, Internet banking, mobile banking, treasury management services, remote deposit services, electronic funds transfers through automated clearing house services, domestic and foreign wire transfers, cash management, vault services, and loan and deposit sweep accounts. It operates banking offices in approximately 12 counties in Kentucky. Its markets include metropolitan Louisville in Jefferson County and the surrounding counties of Henry and Bullitt. It serves south central Kentucky and southern Kentucky from banking offices in Butler, Green, Hart, Edmonson, Barren, Warren, Ohio and Daviess Counties.
About Cathay General Bancorp
Cathay General Bancorp is a bank holding company. The Company holds Cathay Bank, a California state-chartered commercial bank (the Bank); seven limited partnerships investing in affordable housing investments; GBC Venture Capital, Inc., and Asia Realty Corp. The Company also owns the common stock of five statutory business trusts created for issuing capital securities. The Bank primarily services individuals, professionals and small to medium-sized businesses in the local markets and provides commercial mortgage loans, commercial loans, small business administration (SBA) loans, residential mortgage loans, real estate construction loans, home equity lines of credit and installment loans to individuals for automobile, household and other consumer expenditures. The Bank offers passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, college certificates of deposit and public funds deposits.
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