East West Bancorp (NASDAQ:EWBC – Get Rating) and Eagle Financial Services (OTCMKTS:EFSI – Get Rating) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.
East West Bancorp pays an annual dividend of $1.60 per share and has a dividend yield of 2.3%. Eagle Financial Services pays an annual dividend of $1.20 per share and has a dividend yield of 3.4%. East West Bancorp pays out 22.6% of its earnings in the form of a dividend. Eagle Financial Services pays out 30.7% 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 2 consecutive years.
This table compares East West Bancorp and Eagle Financial Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|East West Bancorp||44.11%||17.69%||1.63%|
|Eagle Financial Services||21.39%||13.26%||0.98%|
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|East West Bancorp||0||2||2||0||2.50|
|Eagle Financial Services||0||0||0||0||N/A|
East West Bancorp presently has a consensus price target of $81.67, suggesting a potential upside of 18.02%. Given East West Bancorp’s higher possible upside, equities research analysts plainly believe East West Bancorp is more favorable than Eagle Financial Services.
Risk & Volatility
East West Bancorp has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Eagle Financial Services has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.
Insider & Institutional Ownership
88.7% of East West Bancorp shares are owned by institutional investors. Comparatively, 1.3% of Eagle Financial Services shares are owned by institutional investors. 0.8% of East West Bancorp shares are owned by company insiders. Comparatively, 12.9% of Eagle Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares East West Bancorp and Eagle Financial Services’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|East West Bancorp||$1.90 billion||5.12||$872.98 million||$7.07||9.79|
|Eagle Financial Services||$54.00 million||2.33||$11.02 million||$3.91||9.14|
East West Bancorp has higher revenue and earnings than Eagle Financial Services. Eagle Financial Services 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.
East West Bancorp beats Eagle Financial Services on 14 of the 16 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. It operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. The company accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. Its loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, and equipment financing, as well as financing services to clients needing a financial bridge to facilitate their business transactions between the United States and China. The company also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. As of January 27, 2022, it operated approximately 120 locations in the United States and China; full-service branches in Hong Kong, Shanghai, Shantou, and Shenzhen; and representative offices in Beijing, Chongqing, Guangzhou, Taipei, and Xiamen. East West Bancorp, Inc. was incorporated in 1998 and is headquartered in Pasadena, California.
About Eagle Financial Services
Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke County that provides various retail and commercial banking products and services in the Shenandoah Valley and Northern Virginia. The company's deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers personal and retirement plan services; investment services comprising tax-deferred annuities, IRAs and rollovers, mutual funds, retirement plans, college savings plans, life insurance, long term care insurance, fixed income investing, brokerage CDs, and full service or discount brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through twelve full-service branches, two loan production offices, one wealth management office, and one drive-through only facility, as well as 13 ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, Virginia.
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