Analyzing Cathay General Bancorp (NASDAQ:CATY) & U.S. Bancorp (NYSE:USB)

Cathay General Bancorp (NASDAQ:CATY) and U.S. Bancorp (NYSE:USB) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, earnings, valuation, risk and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cathay General Bancorp	24.66%	11.71%	1.43%
U.S. Bancorp	18.49%	13.69%	1.15%

Dividends

Cathay General Bancorp pays an annual dividend of $1.52 per share and has a dividend yield of 2.5%. U.S. Bancorp pays an annual dividend of $2.08 per share and has a dividend yield of 3.3%. Cathay General Bancorp pays out 29.7% of its earnings in the form of a dividend. U.S. Bancorp pays out 41.5% 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. U.S. Bancorp has increased its dividend for 14 consecutive years. U.S. Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

75.0% of Cathay General Bancorp shares are held by institutional investors. Comparatively, 77.6% of U.S. Bancorp shares are held by institutional investors. 4.5% of Cathay General Bancorp shares are held by insiders. Comparatively, 0.2% of U.S. Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Cathay General Bancorp has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, U.S. Bancorp has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Cathay General Bancorp and U.S. Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cathay General Bancorp	1	4	1	0	2.00
U.S. Bancorp	0	8	16	1	2.72

Cathay General Bancorp currently has a consensus target price of $62.25, indicating a potential upside of 0.39%. U.S. Bancorp has a consensus target price of $67.06, indicating a potential upside of 6.68%. Given U.S. Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe U.S. Bancorp is more favorable than Cathay General Bancorp.

Valuation & Earnings

This table compares Cathay General Bancorp and U.S. Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cathay General Bancorp	$1.38 billion	2.99	$315.12 million	$5.12	12.11
U.S. Bancorp	$42.86 billion	2.29	$7.57 billion	$5.01	12.55

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

Summary

U.S. Bancorp beats Cathay General Bancorp on 12 of the 18 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 U.S. Bancorp

U.S. Bancorp, a financial services holding company, provides various financial services to individuals, businesses, institutional organizations, governmental entities, and other financial institutions in the United States. It operates through Wealth, Corporate, Commercial and Institutional Banking; Consumer and Business Banking; Payment Services; and Treasury and Corporate Support segments. The company offers depository services, including checking accounts, savings accounts, and time certificate contracts; and lending services, such as traditional credit products and credit card services, lease financing and import/export trade, asset-backed lending, agricultural finance, and other products. It also provides ancillary services comprising capital markets, treasury management, and receivable lock-box collection services to corporate and governmental entity customers. In addition, the company offers asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. Further, it provides investment and insurance products to its customers principally within its domestic markets, as well as fund administration services to mutual and other funds. Additionally, the company provides corporate and purchasing card, and corporate trust services. Furthermore, it offers trust and investment management, merchant and ATM processing, mortgage banking, insurance, and brokerage and leasing services. U.S. Bancorp was founded in 1863 and is headquartered in Minneapolis, Minnesota.