Head-To-Head Contrast: East West Bancorp (NASDAQ:EWBC) and Barclays (NYSE:BCS)

Barclays (NYSE:BCS) and East West Bancorp (NASDAQ:EWBC) are both large-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, earnings, risk, dividends, analyst recommendations, institutional ownership and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Barclays	22.27%	8.80%	0.42%
East West Bancorp	30.45%	16.07%	1.75%

Dividends

Barclays pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. East West Bancorp pays an annual dividend of $3.20 per share and has a dividend yield of 2.4%. Barclays pays out 22.4% of its earnings in the form of a dividend. East West Bancorp pays out 30.8% 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. East West Bancorp has increased its dividend for 8 consecutive years. East West Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

3.4% of Barclays shares are owned by institutional investors. Comparatively, 89.5% of East West Bancorp shares are owned by institutional investors. 0.0% of Barclays shares are owned by company insiders. Comparatively, 0.9% of East West Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Barclays and East West Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barclays	0	6	4	0	2.40
East West Bancorp	0	5	9	1	2.73

East West Bancorp has a consensus target price of $141.92, suggesting a potential upside of 8.53%. Given East West Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe East West Bancorp is more favorable than Barclays.

Earnings & Valuation

This table compares Barclays and East West Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barclays	$38.42 billion	2.37	$9.46 billion	$2.68	10.07
East West Bancorp	$4.67 billion	3.83	$1.33 billion	$10.40	12.57

Barclays has higher revenue and earnings than East West Bancorp. Barclays 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.

Volatility and Risk

Barclays has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, East West Bancorp has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Summary

East West Bancorp beats Barclays on 14 of the 18 factors compared between the two stocks.

About Barclays

Barclays PLC provides various financial services in the United Kingdom, Europe, the Americas, Africa, the Middle East, and Asia. The company operates through Barclays UK and Barclays International division segments. It offers financial services, such as retail banking, credit cards, wholesale banking, investment banking, wealth management, and investment management services. In addition, the company engages in securities dealing activities. The company was formerly known as Barclays Bank Limited and changed its name to Barclays PLC in January 1985. Barclays PLC was founded in 1690 and is headquartered in London, the United Kingdom.

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.