Contrasting East West Bancorp (NASDAQ:EWBC) & AmeriServ Financial (NASDAQ:ASRV)

AmeriServ Financial (NASDAQ:ASRV) and East West Bancorp (NASDAQ:EWBC) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.

Dividends

AmeriServ Financial pays an annual dividend of $0.12 per share and has a dividend yield of 2.5%. East West Bancorp pays an annual dividend of $3.20 per share and has a dividend yield of 2.5%. AmeriServ Financial pays out 23.5% of its earnings in the form of a dividend. East West Bancorp pays out 30.8% 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 increased its dividend for 8 consecutive years. East West Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

31.5% of AmeriServ Financial shares are held by institutional investors. Comparatively, 89.5% of East West Bancorp shares are held by institutional investors. 7.9% of AmeriServ Financial shares are held by company insiders. Comparatively, 0.9% of East West Bancorp shares are held by company 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.

Earnings and Valuation

This table compares AmeriServ Financial and East West Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AmeriServ Financial	$88.34 million	0.94	$5.61 million	$0.51	9.59
East West Bancorp	$4.67 billion	3.79	$1.33 billion	$10.40	12.42

East West Bancorp has higher revenue and earnings than AmeriServ Financial. AmeriServ Financial 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.

Volatility and Risk

AmeriServ Financial has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, East West Bancorp has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AmeriServ Financial	9.51%	7.13%	0.58%
East West Bancorp	30.45%	16.07%	1.75%

Analyst Recommendations

This is a breakdown of recent ratings for AmeriServ Financial and East West Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AmeriServ Financial	0	0	1	0	3.00
East West Bancorp	0	4	10	1	2.80

East West Bancorp has a consensus target price of $144.15, indicating a potential upside of 11.60%. Given East West Bancorp’s higher possible upside, analysts plainly believe East West Bancorp is more favorable than AmeriServ Financial.

Summary

East West Bancorp beats AmeriServ Financial on 15 of the 18 factors compared between the two stocks.

About AmeriServ Financial

AmeriServ Financial, Inc. is a holding company, which engages in the provision of consumer, mortgage and commercial financial products and services through its subsidiary. It operates through the following segments: Community Banking, Wealth Management, and Investment or Parent. The Community Banking segment includes both retail and commercial banking activities. The Wealth Management segment involves in the operations of a Trust Company, West Chester Capital Advisors an investment advisory firm, and Financial Services. The Investment or Parent segment offers investment securities, borrowing activities, and general corporate expenses. The company was founded in January 1983 and is headquartered in Johnstown, PA.

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.