Head-To-Head Review: Cathay General Bancorp (NASDAQ:CATY) vs. Summit State Bank (NASDAQ:SSBI)

Summit State Bank (NASDAQ:SSBI) and Cathay General Bancorp (NASDAQ:CATY) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Earnings & Valuation

This table compares Summit State Bank and Cathay General Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit State Bank	$58.82 million	1.50	$6.80 million	$1.01	12.86
Cathay General Bancorp	$1.38 billion	2.30	$315.12 million	$4.54	10.47

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Summit State Bank and Cathay General Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit State Bank	1	0	0	0	1.00
Cathay General Bancorp	0	3	2	0	2.40

Cathay General Bancorp has a consensus target price of $52.50, suggesting a potential upside of 10.46%. Given Cathay General Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Cathay General Bancorp is more favorable than Summit State Bank.

Profitability

This table compares Summit State Bank and Cathay General Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Summit State Bank	11.55%	N/A	N/A
Cathay General Bancorp	22.76%	10.89%	1.32%

Risk and Volatility

Summit State Bank has a beta of 0.19, suggesting that its stock price is 81% less volatile than the S&P 500. Comparatively, Cathay General Bancorp has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.

Insider & Institutional Ownership

75.0% of Cathay General Bancorp shares are owned by institutional investors. 4.9% of Cathay General Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Cathay General Bancorp beats Summit State Bank on 13 of the 14 factors compared between the two stocks.

About Summit State Bank

Summit State Bank engages in providing an array of financial services to small and medium-sized businesses, their owners and employees, entrepreneurs, high net worth families, foundations, estates, and individual consumers. It specializes in business services, personal accounts, nonprofit programs, and mobile banking ranging from lending, checking, merchant, eBanking, automated teller machines, equity loans, and others. The company was founded on December 20, 1982 and is headquartered in Santa Rosa, CA.

About Cathay General Bancorp

Cathay General Bancorp operates as the holding company for Cathay Bank that offers various commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States. The company offers various deposit products, including passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits. It also provides loan products, such as commercial mortgage loans, commercial loans, small business administration loans, residential mortgage loans, real estate construction loans, and home equity lines of credit, as well as installment loans to individuals for household, and other consumer expenditures. In addition, the company offers trade financing, letter of credit, wire transfer, forward currency spot and forward contract, safe deposit, collection, automatic teller machine, Internet banking, investment, and other customary bank services, as well as securities and insurance products. Cathay General Bancorp was founded in 1962 and is headquartered in Los Angeles, California.