Financial Analysis: PacWest Bancorp (PACW) and Its Rivals

PacWest Bancorp (NASDAQ: PACW) is one of 304 publicly-traded companies in the “Banks” industry, but how does it compare to its competitors? We will compare PacWest Bancorp to similar companies based on the strength of its profitability, dividends, risk, earnings, valuation, institutional ownership and analyst recommendations.

Profitability

This table compares PacWest Bancorp and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PacWest Bancorp 30.80% 7.87% 1.62%
PacWest Bancorp Competitors 18.42% 8.18% 0.92%

Dividends

PacWest Bancorp pays an annual dividend of $2.00 per share and has a dividend yield of 3.8%. PacWest Bancorp pays out 67.6% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 1.9% and pay out 35.3% of their earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for PacWest Bancorp and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PacWest Bancorp 0 6 5 1 2.58
PacWest Bancorp Competitors 2389 8584 8608 365 2.35

PacWest Bancorp presently has a consensus price target of $53.64, suggesting a potential upside of 1.18%. As a group, “Banks” companies have a potential downside of 11.79%. Given PacWest Bancorp’s stronger consensus rating and higher possible upside, research analysts clearly believe PacWest Bancorp is more favorable than its competitors.

Risk and Volatility

PacWest Bancorp has a beta of 1.59, meaning that its stock price is 59% more volatile than the S&P 500. Comparatively, PacWest Bancorp’s competitors have a beta of 0.79, meaning that their average stock price is 21% less volatile than the S&P 500.

Insider and Institutional Ownership

82.4% of PacWest Bancorp shares are owned by institutional investors. Comparatively, 51.5% of shares of all “Banks” companies are owned by institutional investors. 1.0% of PacWest Bancorp shares are owned by company insiders. Comparatively, 10.5% of shares of all “Banks” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares PacWest Bancorp and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
PacWest Bancorp $1.13 billion $352.16 million 17.91
PacWest Bancorp Competitors $5.63 billion $846.66 million 409.01

PacWest Bancorp’s competitors have higher revenue and earnings than PacWest Bancorp. PacWest Bancorp is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Summary

PacWest Bancorp beats its competitors on 8 of the 15 factors compared.

About PacWest Bancorp

PacWest Bancorp is a bank holding company for Pacific Western Bank (the Bank). The Company is focused on relationship-based business banking to small, middle-market and venture-backed businesses. As of October 23, 2017, the Bank offered a range of loan and deposit products and services through 83 branches located throughout the state of California, one branch located in Durham, North Carolina, and several loan production offices located in cities across the country. The Company provides commercial banking services, and deposit and treasury management services to small and middle-market businesses. It offers products and services through its CapitalSource and Square 1 Bank divisions. In addition, the Company provides investment advisory and asset management services to select clients through Square 1 Asset Management, Inc., a subsidiary of the Bank.

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