East West Bancorp (EWBC) & Stock Yards Bancorp (SYBT) Critical Analysis
East West Bancorp (NASDAQ: SYBT) and Stock Yards Bancorp (NASDAQ:SYBT) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.
Institutional & Insider Ownership
88.9% of East West Bancorp shares are held by institutional investors. Comparatively, 48.6% of Stock Yards Bancorp shares are held by institutional investors. 0.9% of East West Bancorp shares are held by insiders. Comparatively, 6.2% of Stock Yards Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a breakdown of current recommendations for East West Bancorp and Stock Yards Bancorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|East West Bancorp||0||5||8||0||2.62|
|Stock Yards Bancorp||0||1||1||0||2.50|
East West Bancorp currently has a consensus price target of $71.50, suggesting a potential upside of 13.56%. Stock Yards Bancorp has a consensus price target of $40.00, suggesting a potential upside of 3.23%. Given East West Bancorp’s stronger consensus rating and higher probable upside, research analysts plainly believe East West Bancorp is more favorable than Stock Yards Bancorp.
East West Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 1.5%. Stock Yards Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 2.4%. East West Bancorp pays out 26.6% of its earnings in the form of a dividend. Stock Yards Bancorp pays out 48.2% 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. Stock Yards Bancorp has raised its dividend for 6 consecutive years. Stock Yards Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
East West Bancorp has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500. Comparatively, Stock Yards Bancorp has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.
Valuation & Earnings
This table compares East West Bancorp and Stock Yards Bancorp’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|East West Bancorp||$1.58 billion||5.76||$505.62 million||$3.46||18.20|
|Stock Yards Bancorp||$155.97 million||5.65||$38.04 million||$1.91||20.29|
East West Bancorp has higher revenue and earnings than Stock Yards Bancorp. East West Bancorp is trading at a lower price-to-earnings ratio than Stock Yards Bancorp, indicating that it is currently the more affordable of the two stocks.
This table compares East West Bancorp and Stock Yards Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|East West Bancorp||34.15%||15.12%||1.59%|
|Stock Yards Bancorp||26.61%||14.66%||1.52%|
East West Bancorp beats Stock Yards Bancorp on 13 of the 17 factors compared between the two stocks.
East West Bancorp Company Profile
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 small and medium-sized businesses, business executives, professionals, and other individuals in the United States and Greater China. It operates through three segments: Retail Banking, Commercial Banking, and Other. The company offers various deposit products, including personal and business checking and savings accounts, time deposits, individual retirement accounts, travelers checks, safe deposit boxes, and MasterCard and Visa merchant deposit services. It is involved in lending activities, such as commercial and residential real estate, construction, and trade finance, as well as commercial business comprising accounts receivable, small business administration, inventory, and working capital loans. In addition, the company offers commercial lending loans that include commercial and industrial, multifamily residential, and land loans; and consumer lending loans, which comprise single-family residential, home equity lines of credit, and other consumer loans, as well as financing to clients needing a financial bridge to facilitate their business transactions between the United States and Greater China. Further, it provides various international finance, trade finance, and cash management services and products; treasury services; and Internet-based services, including online banking services. As of January 25, 2018, the company operated a network of approximately 130 locations in California, Georgia, Massachusetts, Nevada, New York, Texas, and Washington; full service branches in Hong Kong, Shanghai, Shantou, and Shenzhen; and representative offices in Beijing, Chongqing, Guangzhou, Taipei, and Xiamen. East West Bancorp, Inc. was founded in 1998 and is headquartered in Pasadena, California.
Stock Yards Bancorp Company Profile
Stock Yards Bancorp, Inc. operates as the holding company for Stock Yards Bank & Trust Company that provides commercial and personal banking services in Louisville, Indianapolis, and Cincinnati. Its deposit products include demand deposits, savings deposits, certificates of deposit, money market deposits, and time deposits. The company's loan portfolio comprises commercial and industrial, construction and development, undeveloped land, real estate mortgage, and consumer loans; and originates and sells single-family residential mortgages. In addition, it offers securities brokerage services through an arrangement with a third party broker-dealer; and investment management, trust, employee benefit plan, estate administration, and financial planning services. As of December 31, 2017, the company had 37 banking locations, including 28 full service banking locations in the Louisville metropolitan statistical area (MSA), 4 full service banking locations in the Indianapolis MSA, and 5 full service banking locations in the Cincinnati MSA. Stock Yards Bancorp, Inc. was founded in 1904 and is headquartered in Louisville, Kentucky.
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