OP Bancorp (NASDAQ:OPBK) versus Prosperity Bancshares (NYSE:PB) Head to Head Analysis

OP Bancorp (NASDAQ:OPBK) and Prosperity Bancshares (NYSE:PB) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.

Valuation & Earnings

This table compares OP Bancorp and Prosperity Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OP Bancorp	$154.05 million	1.29	$21.07 million	$1.57	8.52
Prosperity Bancshares	$1.19 billion	5.31	$479.39 million	$5.61	11.87

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for OP Bancorp and Prosperity Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OP Bancorp	0	1	2	1	3.00
Prosperity Bancshares	0	6	11	0	2.65

OP Bancorp currently has a consensus price target of $16.50, indicating a potential upside of 23.41%. Prosperity Bancshares has a consensus price target of $80.50, indicating a potential upside of 20.92%. Given OP Bancorp’s stronger consensus rating and higher possible upside, equities research analysts clearly believe OP Bancorp is more favorable than Prosperity Bancshares.

Institutional & Insider Ownership

53.6% of OP Bancorp shares are held by institutional investors. Comparatively, 80.7% of Prosperity Bancshares shares are held by institutional investors. 20.4% of OP Bancorp shares are held by company insiders. Comparatively, 4.2% of Prosperity Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares OP Bancorp and Prosperity Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OP Bancorp	14.42%	11.24%	0.95%
Prosperity Bancshares	30.28%	7.06%	1.37%

Dividends

OP Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 3.6%. Prosperity Bancshares pays an annual dividend of $2.40 per share and has a dividend yield of 3.6%. OP Bancorp pays out 30.6% of its earnings in the form of a dividend. Prosperity Bancshares pays out 42.8% 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. Prosperity Bancshares has increased its dividend for 27 consecutive years. Prosperity Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

OP Bancorp has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, Prosperity Bancshares has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Summary

Prosperity Bancshares beats OP Bancorp on 11 of the 18 factors compared between the two stocks.

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.

About Prosperity Bancshares

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; term loans and lines of credit; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. The company was incorporated in 1983 and is headquartered in Houston, Texas.