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

Volatility and Risk

SmartFinancial has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, Hope Bancorp has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for SmartFinancial and Hope Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SmartFinancial 0 1 4 0 2.80
Hope Bancorp 0 3 0 0 2.00

SmartFinancial presently has a consensus target price of $25.33, suggesting a potential upside of 22.09%. Hope Bancorp has a consensus target price of $16.67, suggesting a potential upside of 22.01%. Given SmartFinancial’s stronger consensus rating and higher probable upside, research analysts clearly believe SmartFinancial is more favorable than Hope Bancorp.

Dividends

Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 4.1%. SmartFinancial does not pay a dividend. Hope Bancorp pays out 38.9% of its earnings in the form of a dividend. Hope Bancorp has increased its dividend for 2 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
SmartFinancial 18.23% 8.14% 1.00%
Hope Bancorp 24.99% 9.48% 1.19%

Insider and Institutional Ownership

34.8% of SmartFinancial shares are owned by institutional investors. Comparatively, 89.3% of Hope Bancorp shares are owned by institutional investors. 9.8% of SmartFinancial shares are owned by company insiders. Comparatively, 5.1% of Hope Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares SmartFinancial and Hope Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SmartFinancial $98.76 million 2.93 $18.10 million $1.55 13.39
Hope Bancorp $710.35 million 2.44 $189.59 million $1.44 9.49

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

Summary

Hope Bancorp beats SmartFinancial on 9 of the 17 factors compared between the two stocks.

SmartFinancial Company Profile

SmartFinancial, Inc. operates as the bank holding company for SmartBank that provides various financial services to individuals and corporate customers in Tennessee, Alabama, Florida, and Georgia. The company offers various deposit products, including interest bearing and non-interest bearing checking accounts, savings accounts, money market accounts, individual retirement accounts, and certificates of deposit. It also provides commercial real estate loans, consumer real estate loans, and construction and land development loans; commercial and industrial loans, including commercial, financial, and agricultural loans; and consumer and other loans, such as direct consumer installment loans, overdrafts and other revolving credit loans, and educational loans. In addition, the company offers Internet and mobile banking services. As of December 31, 2018, it operated through 29 full-service branches located in Tennessee, Alabama, and Florida; and 2 loan production offices, 2 mortgage loan production offices, and 2 service centers. SmartFinancial, Inc. is headquartered in Knoxville, Tennessee.

Hope Bancorp Company Profile

Hope Bancorp, Inc. operates as the bank holding company for Bank of Hope that provides banking services to small and medium-sized businesses and individuals in the United States. The company offers personal and business checking, money market, savings, time deposit, and individual retirement accounts. It also provides commercial loans to businesses for various purposes, such as working capital, purchasing inventory, debt refinancing, business acquisitions, and other business related financing needs; commercial real estate loans; small business administration (SBA) loans; and consumer loans, such as auto, home equity, single-family mortgage, and signature loans. In addition, the company offers trade finance services, including the issuance and negotiation of letters of credit, as well as handles documentary collections; commercial equipment lease financing; and warehouse lines of credit to mortgage loan originators. Further, it provides cash management services, such as remote deposit capture, lock box, and ACH origination services; investment and wealth management services; mobile banking; debit and credit card services; foreign exchanges services, safe deposit boxes, and other customary bank services; and Internet banking and bill-pay services, as well as operates automated teller machines. As of February 27, 2019, the company operated 63 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia, and Alabama; SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California, and Houston; a commercial loan production office in Northern California and Seattle; residential mortgage loan production offices in California; and a representative office in Seoul, Korea. The company was formerly known as BBCN Bancorp, Inc. and changed its name to Hope Bancorp, Inc. in August 2016. Hope Bancorp, Inc. was incorporated in 2000 and is headquartered in Los Angeles, California.

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