Head to Head Comparison: FS Bancorp (NASDAQ:FSBW) and Hope Bancorp (NASDAQ:HOPE)

FS Bancorp (NASDAQ:FSBW) and Hope Bancorp (NASDAQ:HOPE) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, risk, earnings, valuation and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FS Bancorp	15.19%	11.08%	1.05%
Hope Bancorp	5.81%	5.09%	0.62%

Earnings and Valuation

This table compares FS Bancorp and Hope Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FS Bancorp	$219.52 million	1.34	$33.35 million	$4.28	9.15
Hope Bancorp	$498.70 million	2.87	$61.59 million	$0.46	24.30

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

Risk & Volatility

FS Bancorp has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Hope Bancorp has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Institutional and Insider Ownership

63.9% of FS Bancorp shares are owned by institutional investors. Comparatively, 84.0% of Hope Bancorp shares are owned by institutional investors. 12.7% of FS Bancorp shares are owned by insiders. Comparatively, 5.2% of Hope Bancorp shares are owned by 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.

Dividends

FS Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 3.0%. Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 5.0%. FS Bancorp pays out 27.1% of its earnings in the form of a dividend. Hope Bancorp pays out 121.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FS Bancorp has raised its dividend for 12 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for FS Bancorp and Hope Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FS Bancorp	0	1	1	0	2.50
Hope Bancorp	1	2	1	0	2.00

FS Bancorp presently has a consensus price target of $46.00, indicating a potential upside of 17.50%. Hope Bancorp has a consensus price target of $13.75, indicating a potential upside of 22.99%. Given Hope Bancorp’s higher probable upside, analysts plainly believe Hope Bancorp is more favorable than FS Bancorp.

About FS Bancorp

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans. It operates full bank service branches and home loan production offices in suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, and Thurston counties; and a loan production office in the market area of the Tri-Cities. FS Bancorp, Inc. was founded in 1936 and is headquartered in Mountlake Terrace, Washington.

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.