Analyzing OP Bancorp (NASDAQ:OPBK) & M&T Bank (NYSE:MTB)

OP Bancorp (NASDAQ:OPBK) and M&T Bank (NYSE:MTB) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for OP Bancorp and M&T Bank, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OP Bancorp 0 0 1 0 3.00
M&T Bank 0 6 5 0 2.45

M&T Bank has a consensus target price of $159.76, suggesting a potential upside of 7.06%. Given M&T Bank’s higher probable upside, analysts plainly believe M&T Bank is more favorable than OP Bancorp.

Institutional & Insider Ownership

52.9% of OP Bancorp shares are held by institutional investors. Comparatively, 85.1% of M&T Bank shares are held by institutional investors. 22.5% of OP Bancorp shares are held by insiders. Comparatively, 0.6% of M&T Bank shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

OP Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 3.9%. M&T Bank pays an annual dividend of $4.40 per share and has a dividend yield of 2.9%. OP Bancorp pays out 47.1% of its earnings in the form of a dividend. M&T Bank pays out 43.9% 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 has increased its dividend for 2 consecutive years and M&T Bank has increased its dividend for 1 consecutive years. OP Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares OP Bancorp and M&T Bank’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OP Bancorp $64.43 million 2.44 $13.13 million $0.85 12.21
M&T Bank $6.28 billion 3.06 $1.35 billion $10.02 14.89

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

Profitability

This table compares OP Bancorp and M&T Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OP Bancorp 28.25% 12.96% 1.31%
M&T Bank 28.58% 11.70% 1.22%

Volatility & Risk

OP Bancorp has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, M&T Bank has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Summary

M&T Bank beats OP Bancorp on 11 of the 17 factors compared between the two stocks.

About OP Bancorp

OP Bancorp operates as a bank holding company, which engages in the provision of general commercial banking services through its subsidiary. It offers deposit, lending, online banking, cash management, e-statements, mobile banking, zelle, and wire transfer services. The firm serves the small- and medium-sized businesses, professionals, and residents primarily Korean and other ethnic minority communities. The company was founded on June 10, 2005 and is headquartered in Los Angeles, CA.

About M&T Bank

M&T Bank Corp. operates as a bank holding company, which engages in the provision of retail and commercial banking, trust, wealth management and investment services. It operates through following segments: Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking, and Retail Banking. The Business Banking segment provides services to small businesses and professionals through the company’s branch network, business banking centres and other delivery channels such as telephone banking, Internet banking and automated teller machines. The Commercial Banking segment offers credit products and banking services for middle-market and large commercial customers. The Commercial Real Estate segment includes credit and deposit services to its customers. The Discretionary Portfolio segment consists of investment and trading securities, residential mortgage loans and other assets, short-term and long-term borrowed funds, brokered certificates of deposit and interest rate swap agreements related thereto, and Cayman Islands branch deposits. The Residential Mortgage Banking segment comprises of residential mortgage loans and sells substantial

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