Comparing Malaga Financial (OTCMKTS:MLGF) & East West Bancorp (NASDAQ:EWBC)

Malaga Financial (OTCMKTS:MLGF) and East West Bancorp (NASDAQ:EWBC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.

Dividends

Malaga Financial pays an annual dividend of $1.00 per share and has a dividend yield of 4.7%. East West Bancorp pays an annual dividend of $3.20 per share and has a dividend yield of 2.7%. Malaga Financial pays out 45.9% of its earnings in the form of a dividend. East West Bancorp pays out 33.6% 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 raised its dividend for 8 consecutive years.

Volatility and Risk

Malaga Financial has a beta of 0.1, indicating that its stock price is 90% less volatile than the S&P 500. Comparatively, East West Bancorp has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Profitability

This table compares Malaga Financial and East West Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Malaga Financial	N/A	N/A	N/A
East West Bancorp	28.36%	15.72%	1.68%

Analyst Recommendations

This is a summary of current recommendations for Malaga Financial and East West Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Malaga Financial	0	0	0	0	0.00
East West Bancorp	0	5	11	0	2.69

East West Bancorp has a consensus price target of $127.36, indicating a potential upside of 8.54%. Given East West Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe East West Bancorp is more favorable than Malaga Financial.

Insider and Institutional Ownership

1.2% of Malaga Financial shares are held by institutional investors. Comparatively, 89.5% of East West Bancorp shares are held by institutional investors. 1.0% of East West Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Malaga Financial and East West Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Malaga Financial	N/A	N/A	$21.55 million	$2.18	9.84
East West Bancorp	$4.67 billion	3.44	$1.33 billion	$9.52	12.33

East West Bancorp has higher revenue and earnings than Malaga Financial. Malaga Financial 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.

Summary

East West Bancorp beats Malaga Financial on 15 of the 16 factors compared between the two stocks.

About Malaga Financial

Malaga Financial Corporation operates as the holding company for Malaga Bank that provides various community banking products and services to personal and business customers. It offers checking, savings, NOW, and money market accounts, certificates of deposits, business banking, consumer, and demand deposits. The company also provides commercial real estate, single and multi-family residential mortgage, consumer, 14-unit investment property, construction, personal, and business loans; home equity lines of credit; and certificates of deposit. In addition, it offers coupon redemption, direct deposit, overdraft lines of credit, telephone transfers, U.S. savings bond redemption, and wire transfer services; and ATM and VISA debit cards, bank by mail, medallion signature guarantee, night depository, notary, safe deposit boxes, and trust deed note collection services. Further, the company provides online banking services, including bill payer, e-statements, and mobile banking services. The company was incorporated in 2002 and is headquartered in Palos Verdes Estates, California.

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 in the United States. The company operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. It accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. The company’s loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction finance, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, loan syndication, and equipment financing, as well as financing services for clients to facilitate their business transactions between the United States and Asia. It also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. The company was founded in 1973 and is headquartered in Pasadena, California.