Analyzing First Horizon (NYSE:FHN) and OP Bancorp (NASDAQ:OPBK)

First Horizon (NYSE:FHN) and OP Bancorp (NASDAQ:OPBK) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Horizon	17.10%	10.55%	1.13%
OP Bancorp	13.91%	10.72%	0.91%

Earnings and Valuation

This table compares First Horizon and OP Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Horizon	$5.03 billion	2.27	$775.00 million	$1.55	14.51
OP Bancorp	$154.05 million	1.36	$21.07 million	$1.48	9.50

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

Insider & Institutional Ownership

80.3% of First Horizon shares are owned by institutional investors. Comparatively, 53.6% of OP Bancorp shares are owned by institutional investors. 1.0% of First Horizon shares are owned by company insiders. Comparatively, 20.4% of OP Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for First Horizon and OP Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Horizon	0	6	10	1	2.71
OP Bancorp	0	1	0	0	2.00

First Horizon presently has a consensus target price of $23.2813, indicating a potential upside of 3.52%. OP Bancorp has a consensus target price of $15.50, indicating a potential upside of 10.24%. Given OP Bancorp’s higher possible upside, analysts clearly believe OP Bancorp is more favorable than First Horizon.

Dividends

First Horizon pays an annual dividend of $0.60 per share and has a dividend yield of 2.7%. OP Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 3.4%. First Horizon pays out 38.7% of its earnings in the form of a dividend. OP Bancorp pays out 32.4% 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. OP Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

First Horizon has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, OP Bancorp has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Summary

First Horizon beats OP Bancorp on 11 of the 17 factors compared between the two stocks.

About First Horizon

First Horizon Corporation operates as the bank holding company for First Horizon Bank that provides various financial services. The company operates through Regional Banking and Specialty Banking segments. It offers general banking services for consumers, businesses, financial institutions, and governments. The company also accepts deposits; provides underwriting services for bank-eligible securities and other fixed-income securities by financial subsidiaries; sells loans and derivatives; financial planning; and offers investment and financial advisory services. In addition, it offers mortgage banking; loan syndications; brokerage services; commercial and business banking for business enterprises, consumer banking, and private client and wealth management services; capital markets, professional commercial real estate, mortgage warehouse and asset-based lending, franchise and equipment finance, tax credit finance, energy and healthcare finance, asset management, and corporate and correspondent banking services. Further, the company provides transaction processing services including check clearing services and remittance processing, credit cards, investment, and sale of mutual fund and retail insurances, as well as trust, fiduciary, and agency services. First Horizon Corporation was founded in 1864 and is headquartered in Memphis, Tennessee.

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.