Hope Bancorp (NASDAQ: CSFL) and Centerstate Bank (NASDAQ:CSFL) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Earnings and Valuation

This table compares Hope Bancorp and Centerstate Bank’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hope Bancorp $638.52 million 3.54 $139.44 million $1.22 14.25
Centerstate Bank $316.50 million 8.11 $55.79 million N/A N/A

Hope Bancorp has higher revenue and earnings than Centerstate Bank.

Volatility & Risk

Hope Bancorp has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500. Comparatively, Centerstate Bank has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500.

Institutional & Insider Ownership

90.1% of Hope Bancorp shares are held by institutional investors. Comparatively, 80.0% of Centerstate Bank shares are held by institutional investors. 5.1% of Hope Bancorp shares are held by company insiders. Comparatively, 2.4% of Centerstate Bank shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Hope Bancorp 23.76% 9.68% 1.29%
Centerstate Bank 21.38% 8.96% 1.25%

Analyst Ratings

This is a summary of recent recommendations for Hope Bancorp and Centerstate Bank, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hope Bancorp 0 6 0 0 2.00
Centerstate Bank 0 1 5 0 2.83

Hope Bancorp currently has a consensus target price of $19.10, suggesting a potential upside of 9.83%. Centerstate Bank has a consensus target price of $31.17, suggesting a potential upside of 2.22%. Given Hope Bancorp’s higher probable upside, equities research analysts clearly believe Hope Bancorp is more favorable than Centerstate Bank.

Dividends

Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 3.2%. Centerstate Bank pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. Hope Bancorp pays out 45.9% of its earnings in the form of a dividend. Centerstate Bank has raised its dividend for 2 consecutive years.

Summary

Hope Bancorp beats Centerstate Bank on 10 of the 16 factors compared between the two stocks.

About Hope Bancorp

Hope Bancorp, Inc. operates as the bank holding company for Bank of Hope that provides banking services primarily 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 to high-net-worth clients; 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, 2018, 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, and Annandale, Virginia; a commercial loan production office in Fremont, California; 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.

About Centerstate Bank

CenterState Bank Corporation operates as the holding company for CenterState Bank, N.A. that provides various consumer and commercial banking services to individuals, businesses, and industries in Florida. The company's deposit products include savings, demand, negotiable order of withdrawal, and money market deposit accounts, as well as certificates of deposit and time deposits. It also offers real estate loans to individuals and businesses for the purchase, improvement of, or investment in real estate; construction of single-family residential and commercial units; and development of single-family residential building lots. In addition, the company provides commercial loans to individuals and small-to-medium sized businesses for working capital, equipment purchases, and various other business purposes; and consumer loans comprising loans to individuals for various consumer purposes, as well as business purpose loans. Further, it offers mutual funds, annuities, and other investment products. Additionally, the company sells fixed income securities; and provides hedging, loan brokerage, correspondent bank deposits, safe-keeping, bond accounting, asset/liability consulting, international wires, clearing and corporate checking account, and other correspondent banking related services. As of December 31, 2017, it operated 78 bank office network located in 28 counties of Florida; and 1 loan production office in Florida, and 1 loan production office in Macon, Georgia. The company was formerly known as CenterState Banks, Inc. and changed its name to CenterState Bank Corporation in September 2017. CenterState Bank Corporation was founded in 1989 and is headquartered in Winter Haven, Florida.

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