Reviewing Cathay General Bancorp (NASDAQ:CATY) & City Bank (OTCMKTS:CTBK)

Cathay General Bancorp (NASDAQ:CATY) and City Bank (OTCMKTS:CTBK) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Institutional and Insider Ownership

75.0% of Cathay General Bancorp shares are held by institutional investors. 4.8% of Cathay General Bancorp shares are held by insiders. Comparatively, 37.5% of City Bank shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Cathay General Bancorp and City Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cathay General Bancorp	0	3	2	0	2.40
City Bank	0	0	0	0	0.00

Cathay General Bancorp presently has a consensus target price of $52.50, indicating a potential downside of 2.96%. Given City Bank’s higher probable upside, analysts clearly believe City Bank is more favorable than Cathay General Bancorp.

Profitability

This table compares Cathay General Bancorp and City Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cathay General Bancorp	22.76%	10.89%	1.32%
City Bank	N/A	N/A	N/A

Valuation and Earnings

This table compares Cathay General Bancorp and City Bank”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cathay General Bancorp	$1.38 billion	2.66	$315.12 million	$4.54	11.92
City Bank	N/A	N/A	N/A	N/A	N/A

Cathay General Bancorp has higher revenue and earnings than City Bank.

Summary

Cathay General Bancorp beats City Bank on 7 of the 9 factors compared between the two stocks.

About Cathay General Bancorp

Cathay General Bancorp operates as the holding company for Cathay Bank that offers various commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States. The company offers various deposit products, including passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits. It also provides loan products, such as commercial mortgage loans, commercial loans, small business administration loans, residential mortgage loans, real estate construction loans, and home equity lines of credit, as well as installment loans to individuals for household, and other consumer expenditures. In addition, the company offers trade financing, letter of credit, wire transfer, forward currency spot and forward contract, safe deposit, collection, automatic teller machine, Internet banking, investment, and other customary bank services, as well as securities and insurance products. Cathay General Bancorp was founded in 1962 and is headquartered in Los Angeles, California.

About City Bank

As of April 17, 2010, City Bank was acquired by Whidbey Island Bank. City Bank offers commercial banking services. The company was incorporated in 1974 and is headquartered in Lynnwood, Washington.