Analyzing Oak Valley Bancorp (NASDAQ:OVLY) and East West Bancorp (NASDAQ:EWBC)

East West Bancorp (NASDAQ:EWBC) and Oak Valley Bancorp (NASDAQ:OVLY) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of current recommendations for East West Bancorp and Oak Valley Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
East West Bancorp	0	5	10	0	2.67
Oak Valley Bancorp	0	0	1	0	3.00

East West Bancorp currently has a consensus target price of $133.69, indicating a potential upside of 4.44%. Given East West Bancorp’s higher probable upside, research analysts plainly believe East West Bancorp is more favorable than Oak Valley Bancorp.

Volatility & Risk

East West Bancorp has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Oak Valley Bancorp has a beta of 0.21, meaning that its share price is 79% less volatile than the S&P 500.

Valuation & Earnings

This table compares East West Bancorp and Oak Valley Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
East West Bancorp	$4.67 billion	3.75	$1.33 billion	$10.01	12.79
Oak Valley Bancorp	$95.04 million	2.99	$23.91 million	$2.88	11.72

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

Dividends

East West Bancorp pays an annual dividend of $3.20 per share and has a dividend yield of 2.5%. Oak Valley Bancorp pays an annual dividend of $0.75 per share and has a dividend yield of 2.2%. East West Bancorp pays out 32.0% of its earnings in the form of a dividend. Oak Valley Bancorp pays out 26.0% 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. East West Bancorp has raised its dividend for 8 consecutive years and Oak Valley Bancorp has raised its dividend for 11 consecutive years.

Profitability

This table compares East West Bancorp and Oak Valley Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
East West Bancorp	29.59%	16.00%	1.73%
Oak Valley Bancorp	24.80%	11.99%	1.20%

Insider & Institutional Ownership

89.5% of East West Bancorp shares are held by institutional investors. Comparatively, 30.9% of Oak Valley Bancorp shares are held by institutional investors. 0.9% of East West Bancorp shares are held by company insiders. Comparatively, 13.9% of Oak Valley Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

East West Bancorp beats Oak Valley Bancorp on 13 of the 17 factors compared between the two stocks.

About East West Bancorp

East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals in the United States. The company operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. It accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. The company’s loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction finance, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, loan syndication, and equipment financing, as well as financing services for clients to facilitate their business transactions between the United States and Asia. It also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. The company was founded in 1973 and is headquartered in Pasadena, California.

About Oak Valley Bancorp

Oak Valley Bancorp operates as the bank holding company for Oak Valley Community Bank that provides a range of commercial banking services to individuals and small to medium-sized businesses in the Central Valley and the Eastern Sierras. The company's deposits products include checking and savings, money market, health savings, and individual retirement accounts, as well as certificates of deposit. It also offers commercial real estate loans, commercial business lending and trade finance, and small business administration lending, as well as consumer loans, including automobile loans, home mortgages, credit lines, and other personal loans. In addition, the company provides online and mobile banking, remote deposit capture, merchant, night depository, extended hours, wire transfer of funds, note collection services, and automated teller machines. The company was incorporated in 1990 and is headquartered in Oakdale, California.