Analyzing OP Bancorp (NASDAQ:OPBK) and Hancock Whitney (NASDAQ:HWC)

Hancock Whitney (NASDAQ:HWC) and OP Bancorp (NASDAQ:OPBK) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Volatility and Risk

Hancock Whitney has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, OP Bancorp has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.

Profitability

This table compares Hancock Whitney and OP Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hancock Whitney	21.81%	11.36%	1.41%
OP Bancorp	16.87%	12.59%	1.08%

Insider and Institutional Ownership

81.2% of Hancock Whitney shares are owned by institutional investors. Comparatively, 53.6% of OP Bancorp shares are owned by institutional investors. 0.9% of Hancock Whitney shares are owned by company insiders. Comparatively, 9.6% of OP Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for Hancock Whitney and OP Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hancock Whitney	0	3	7	1	2.82
OP Bancorp	0	2	2	0	2.50

Hancock Whitney presently has a consensus target price of $84.56, indicating a potential upside of 16.36%. OP Bancorp has a consensus target price of $17.75, indicating a potential upside of 18.18%. Given OP Bancorp’s higher probable upside, analysts plainly believe OP Bancorp is more favorable than Hancock Whitney.

Valuation & Earnings

This table compares Hancock Whitney and OP Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hancock Whitney	$1.46 billion	3.99	$486.07 million	$5.10	14.25
OP Bancorp	$99.03 million	2.26	$25.64 million	$1.93	7.78

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

Dividends

Hancock Whitney pays an annual dividend of $2.00 per share and has a dividend yield of 2.8%. OP Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 3.7%. Hancock Whitney pays out 39.2% of its earnings in the form of a dividend. OP Bancorp pays out 29.0% 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. Hancock Whitney has increased its dividend for 3 consecutive years. OP Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Hancock Whitney beats OP Bancorp on 13 of the 18 factors compared between the two stocks.

About Hancock Whitney

Hancock Whitney Corporation operates as the financial holding company for Hancock Whitney Bank that provides traditional and online banking services to commercial, small business, and retail customers. It offers various transaction and savings deposit products consisting of brokered deposits, time deposits, and money market accounts; treasury management services, secured and unsecured loan products including revolving credit facilities, and letters of credit and similar financial guarantees; and trust and investment management services to retirement plans, corporations, and individuals, and investment advisory and brokerage products. The company also provides commercial and industrial loans including real and non-real estate loans; construction and land development loans; and residential mortgages, as well as consumer loans. In addition, it offers commercial finance products to middle market and corporate clients, including leases and related structures; facilitates investments in new market tax credit activities and holding certain foreclosed assets; provides customers access to fixed annuity and life insurance products; and underwriting transactions products, as well as debt and mortgage-related securities. The company was founded in 1899 and is headquartered in Gulfport, Mississippi.

About OP Bancorp

OP Bancorp operates as the bank holding company for Open Bank that provides banking products and services in California. It offers demand, checking, savings, money market, and time deposit accounts, as well as certificates of deposit. The company also provides commercial real estate, small business administration, commercial and industrial business, single-family residential, term, consumer, and home mortgage loans; trade financing products; and letters of credit, and SWIFT and export advice. In addition, it offers debit and credit card, online transfer and bill payment, electronic delivery of customer statements, and mobile banking solutions for iPhone and Android phones, including remote check deposit with mobile bill pay; direct deposits, cashier's checks, person to person payments, wire transfers, and automated clearing house (ACH) services; and cash management services, including balance reporting, transfers between accounts, wire transfer initiation, ACH origination, and stop payment services, as well as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company operates full branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Gardena, Buena Park, and Santa Clara in California; and Carrollton, Texas; and operates loan production offices in Pleasanton, California; Atlanta, Georgia; Aurora, Colorado; and Lynnwood in Washington. The company was founded in 2005 and is headquartered in Los Angeles, California.