Cathay General Bancorp (CATY) & People’s United Financial (PBCT) Critical Contrast
Cathay General Bancorp (NASDAQ: CATY) and People’s United Financial (NASDAQ:PBCT) are both mid-cap financials companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.
Cathay General Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 2.4%. People’s United Financial pays an annual dividend of $0.69 per share and has a dividend yield of 4.1%. Cathay General Bancorp pays out 34.6% of its earnings in the form of a dividend. People’s United Financial pays out 77.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cathay General Bancorp has raised its dividend for 10 consecutive years.
This is a breakdown of recent ratings for Cathay General Bancorp and People’s United Financial, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cathay General Bancorp||0||3||2||0||2.40|
|People’s United Financial||2||9||0||0||1.82|
Cathay General Bancorp currently has a consensus price target of $40.00, indicating a potential upside of 13.38%. People’s United Financial has a consensus price target of $18.31, indicating a potential upside of 9.61%. Given Cathay General Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Cathay General Bancorp is more favorable than People’s United Financial.
Volatility and Risk
Cathay General Bancorp has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500. Comparatively, People’s United Financial has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.
Valuation and Earnings
This table compares Cathay General Bancorp and People’s United Financial’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Cathay General Bancorp||$475.33 million||6.00||$196.31 million||$2.43||14.52|
|People’s United Financial||$1.34 billion||4.21||$300.38 million||$0.89||18.76|
People’s United Financial has higher revenue and earnings than Cathay General Bancorp. Cathay General Bancorp is trading at a lower price-to-earnings ratio than People’s United Financial, indicating that it is currently the more affordable of the two stocks.
This table compares Cathay General Bancorp and People’s United Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cathay General Bancorp||41.63%||10.98%||1.44%|
|People’s United Financial||18.88%||6.14%||0.75%|
Insider & Institutional Ownership
67.0% of Cathay General Bancorp shares are owned by institutional investors. Comparatively, 75.0% of People’s United Financial shares are owned by institutional investors. 5.8% of Cathay General Bancorp shares are owned by insiders. Comparatively, 2.7% of People’s United Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Cathay General Bancorp beats People’s United Financial on 12 of the 17 factors compared between the two stocks.
Cathay General Bancorp Company Profile
Cathay General Bancorp is a bank holding company. The Company holds Cathay Bank, a California state-chartered commercial bank (the Bank); seven limited partnerships investing in affordable housing investments; GBC Venture Capital, Inc., and Asia Realty Corp. The Company also owns the common stock of five statutory business trusts created for issuing capital securities. The Bank primarily services individuals, professionals and small to medium-sized businesses in the local markets and provides commercial mortgage loans, commercial loans, small business administration (SBA) loans, residential mortgage loans, real estate construction loans, home equity lines of credit and installment loans to individuals for automobile, household and other consumer expenditures. The Bank offers passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, college certificates of deposit and public funds deposits.
People’s United Financial Company Profile
People’s United Financial, Inc. is a bank holding company and a financial holding company of People’s United Bank (the Bank). The Bank is engaged in providing commercial banking, retail banking and wealth management services to individual, corporate and municipal customers. The Company operates through two segments: Commercial Banking and Retail Banking. Commercial Banking segment is engaged in commercial real estate lending, commercial and industrial lending, and commercial deposit gathering activities. It offers cash management, correspondent banking, municipal banking, institutional trust services, corporate trust, insurance services and private banking, among others. Retail Banking segment provides consumer lending (including residential mortgage and home equity lending) and consumer deposit gathering activities. The Retail Banking segment also includes brokerage, financial advisory services, investment management services, and life insurance and non-institutional trust services.
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