Comparing Hope Bancorp (NASDAQ:HOPE) and CVB Financial (NASDAQ:CVBF)

Hope Bancorp (NASDAQ:HOPE) and CVB Financial (NASDAQ:CVBF) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Risk & Volatility

Hope Bancorp has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, CVB Financial has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.

Profitability

This table compares Hope Bancorp and CVB Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hope Bancorp	4.27%	4.45%	0.55%
CVB Financial	30.99%	9.21%	1.33%

Insider & Institutional Ownership

84.0% of Hope Bancorp shares are owned by institutional investors. Comparatively, 74.2% of CVB Financial shares are owned by institutional investors. 5.2% of Hope Bancorp shares are owned by insiders. Comparatively, 6.1% of CVB Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Hope Bancorp and CVB Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hope Bancorp	0	1	1	0	2.50
CVB Financial	0	2	2	0	2.50

Hope Bancorp presently has a consensus target price of $13.25, suggesting a potential upside of 20.45%. CVB Financial has a consensus target price of $23.25, suggesting a potential upside of 16.08%. Given Hope Bancorp’s higher probable upside, equities analysts clearly believe Hope Bancorp is more favorable than CVB Financial.

Earnings & Valuation

This table compares Hope Bancorp and CVB Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hope Bancorp	$1.00 billion	1.41	$99.63 million	$0.35	31.43
CVB Financial	$684.59 million	4.03	$200.72 million	$1.45	13.81

CVB Financial has lower revenue, but higher earnings than Hope Bancorp. CVB Financial is trading at a lower price-to-earnings ratio than Hope Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 5.1%. CVB Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. Hope Bancorp pays out 160.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CVB Financial pays out 55.2% of its earnings in the form of a dividend.

Summary

CVB Financial beats Hope Bancorp on 9 of the 15 factors compared between the two stocks.

About Hope Bancorp

Hope Bancorp, Inc. operates as the bank holding company for Bank of Hope that provides retail and commercial banking services for businesses and individuals in the United States. It accepts personal and business checking, money market, savings, time deposit, and individual retirement accounts. The company also offers loans comprising commercial and industrial loans to businesses for various purposes, such as working capital, purchasing inventory, debt refinancing, business acquisitions, international trade finance, other business-related financing, and loans syndication services; commercial real estate loans; residential mortgage loans; small business administration loans; and consumer loans, such as single-family mortgage, home equity, automobile, credit card, and personal loans. In addition, it provides internet banking and bill-pay, remote deposit capture, lock box, and ACH origination services; treasury management services; foreign currency exchange transactions; interest rate contracts and wealth management services; automated teller machine services; and engages in investment activities. Hope Bancorp, Inc. was founded in 1986 and is headquartered in Los Angeles, California.

About CVB Financial

CVB Financial Corp. operates as a bank holding company for Citizens Business Bank, a state-chartered bank that provides banking and financial services to small to mid-sized businesses and individuals. It offers checking, savings, money market, and time certificates of deposit products for business and personal accounts; and serves as a federal tax depository for business customers. The company also provides commercial lending products comprising lines of credit and other working capital financing, accounts receivable lending, and letters of credit; agriculture loans to finance the operating needs of wholesale dairy farm operations, cattle feeders, livestock raisers, and farmers; lease financing services for municipal governments; commercial real estate and construction loans; and consumer financing products, including automobile leasing and financing, lines of credit, credit cards, home mortgages, and home equity loans and lines of credit. In addition, it offers various specialized services, such as treasury management systems for monitoring cash flow, merchant card processing program, armored pick-up and delivery, payroll services, remote deposit capture, electronic funds transfers, wires and automated clearinghouse, and online account access. Further, the company provides trust services, such as fiduciary services, mutual funds, annuities, 401(k) plans, and individual investment accounts. CVB Financial Corp. was founded in 1974 and is headquartered in Ontario, California.