Head to Head Review: Cullen/Frost Bankers (NYSE:CFR) versus OP Bancorp (NASDAQ:OPBK)

Cullen/Frost Bankers (NYSE:CFR) 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 dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares Cullen/Frost Bankers and OP Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cullen/Frost Bankers	22.21%	15.49%	1.24%
OP Bancorp	15.39%	11.75%	0.99%

Risk & Volatility

Cullen/Frost Bankers has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, OP Bancorp has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500.

Insider and Institutional Ownership

86.9% of Cullen/Frost Bankers shares are owned by institutional investors. Comparatively, 53.6% of OP Bancorp shares are owned by institutional investors. 1.1% of Cullen/Frost Bankers shares are owned by insiders. Comparatively, 20.4% of OP Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Cullen/Frost Bankers and OP Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cullen/Frost Bankers	3	6	4	0	2.08
OP Bancorp	0	3	1	0	2.25

Cullen/Frost Bankers currently has a consensus target price of $142.25, suggesting a potential downside of 0.19%. OP Bancorp has a consensus target price of $16.50, suggesting a potential upside of 15.79%. Given OP Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe OP Bancorp is more favorable than Cullen/Frost Bankers.

Valuation & Earnings

This table compares Cullen/Frost Bankers and OP Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cullen/Frost Bankers	$2.92 billion	3.07	$648.56 million	$9.92	14.37
OP Bancorp	$166.66 million	1.27	$25.64 million	$1.71	8.33

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

Dividends

Cullen/Frost Bankers pays an annual dividend of $4.00 per share and has a dividend yield of 2.8%. OP Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 3.4%. Cullen/Frost Bankers pays out 40.3% of its earnings in the form of a dividend. OP Bancorp pays out 28.1% 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. Cullen/Frost Bankers has increased its dividend for 32 consecutive years. OP Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Cullen/Frost Bankers beats OP Bancorp on 11 of the 17 factors compared between the two stocks.

About Cullen/Frost Bankers

Cullen/Frost Bankers, Inc. operates as the bank holding company for Frost Bank that provides commercial and consumer banking services in Texas. The company offers commercial banking services to corporations, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; and treasury management services, as well as originates commercial leasing services. It also provides consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, first mortgage loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. In addition, the company offers international banking services comprising deposits, loans, letters of credit, foreign collections, funds transmitting, and foreign exchange services; correspondent banking activities, including check clearing, transfer of funds, fixed income security services, and securities custody and clearance services. Further, it offers trust, investment, agency, and custodial services for individual and corporate clients; capital market services that include sales and trading, new issue underwriting, money market trading, advisory, and securities safekeeping and clearance; and support for international business activities, including foreign exchange, letters of credit, export-import financing, and other related activities. Additionally, the company offers insurance and securities brokerage services; holding of securities for investment purposes; and investment management services for mutual funds, institutions, and individuals. It serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. The company was founded in 1868 and is headquartered in San Antonio, Texas.

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.