Comparing Hope Bancorp (NASDAQ:HOPE) and Magyar Bancorp (NASDAQ:MGYR)

Magyar Bancorp (NASDAQ:MGYR) and Hope Bancorp (NASDAQ:HOPE) 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, dividends, risk, valuation, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Magyar Bancorp and Hope Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magyar Bancorp	$63.60 million	2.23	$12.56 million	$1.99	11.06
Hope Bancorp	$967.63 million	1.72	$61.59 million	$1.04	12.52

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

Analyst Ratings

This is a summary of recent ratings and price targets for Magyar Bancorp and Hope Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magyar Bancorp	0	1	0	0	2.00
Hope Bancorp	1	4	2	0	2.14

Hope Bancorp has a consensus target price of $14.00, suggesting a potential upside of 7.53%. Given Hope Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Hope Bancorp is more favorable than Magyar Bancorp.

Volatility and Risk

Magyar Bancorp has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500. Comparatively, Hope Bancorp has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Insider & Institutional Ownership

46.3% of Magyar Bancorp shares are held by institutional investors. Comparatively, 84.0% of Hope Bancorp shares are held by institutional investors. 11.1% of Magyar Bancorp shares are held by company insiders. Comparatively, 2.3% of Hope Bancorp shares are held by company 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

Magyar Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.2%. Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 4.3%. Magyar Bancorp pays out 24.1% of its earnings in the form of a dividend. Hope Bancorp pays out 53.8% 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. Magyar Bancorp has raised its dividend for 3 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Magyar Bancorp	19.74%	10.11%	1.19%
Hope Bancorp	12.90%	5.97%	0.72%

Summary

Hope Bancorp beats Magyar Bancorp on 9 of the 17 factors compared between the two stocks.

About Magyar Bancorp

Magyar Bancorp, Inc. is the bank holding company for Magyar Bank, a community bank serving individuals, families and businesses in central New Jersey. The bank offers deposit accounts, including checking and savings accounts and certificates of deposit, along with online and mobile banking services. Its lending services include residential mortgages, home equity loans, commercial real estate financing and other business loans. Magyar Bank also provides commercial banking services to local businesses and organizations.

About Hope Bancorp

Hope Bancorp, Inc. is the bank holding company for Bank of Hope, a commercial bank headquartered in Los Angeles. Bank of Hope was formed in 2016 through the merger of BBCN Bank and Wilshire Bank, bringing together institutions with roots in serving Korean-American communities. The bank provides deposit accounts, commercial and consumer lending, and other banking services to individuals and businesses. Its offerings include commercial real estate and business loans, small-business lending, treasury management, and online and mobile banking.