Head to Head Analysis: OP Bancorp (NASDAQ:OPBK) & Provident Financial (NASDAQ:PROV)

OP Bancorp (NASDAQ:OPBK) and Provident Financial (NASDAQ:PROV) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, analyst recommendations, risk, institutional ownership and dividends.

Valuation & Earnings

This table compares OP Bancorp and Provident Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OP Bancorp	$166.66 million	1.33	$25.64 million	$1.93	7.72
Provident Financial	$59.62 million	1.91	$6.66 million	$1.03	17.73

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

Risk and Volatility

OP Bancorp has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Provident Financial has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500.

Profitability

This table compares OP Bancorp and Provident Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OP Bancorp	16.87%	12.59%	1.08%
Provident Financial	11.16%	5.23%	0.54%

Dividends

OP Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 3.8%. Provident Financial pays an annual dividend of $0.56 per share and has a dividend yield of 3.1%. OP Bancorp pays out 29.0% of its earnings in the form of a dividend. Provident Financial pays out 54.4% 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. OP Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

53.6% of OP Bancorp shares are held by institutional investors. Comparatively, 71.3% of Provident Financial shares are held by institutional investors. 9.6% of OP Bancorp shares are held by company insiders. Comparatively, 11.5% of Provident Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for OP Bancorp and Provident Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OP Bancorp	0	2	2	0	2.50
Provident Financial	0	2	1	0	2.33

OP Bancorp currently has a consensus price target of $17.75, suggesting a potential upside of 19.21%. Provident Financial has a consensus price target of $18.00, suggesting a potential downside of 1.42%. Given OP Bancorp’s stronger consensus rating and higher possible upside, equities research analysts plainly believe OP Bancorp is more favorable than Provident Financial.

Summary

OP Bancorp beats Provident Financial on 12 of the 16 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 Provident Financial

Provident Financial Holdings, Inc. operates as the holding company for Provident Savings Bank, F.S.B. that provides community banking services to consumers and small to mid-sized businesses in the Inland Empire region of Southern California. The company's deposit products include checking, savings, and money market accounts, as well as time deposits; and loan portfolio consists of single-family, multi-family, commercial real estate, construction, mortgage, commercial business, and consumer loans. It also offers investment services comprising the sale of investment products, such as annuities and mutual funds; and trustee services for real estate transactions. The company operates through full-service banking offices in Riverside County and San Bernardino County. Provident Financial Holdings, Inc. was founded in 1956 and is headquartered in Riverside, California.