Financial Analysis: Cathay General Bancorp (CATY) vs. Walker & Dunlop (WD)
Cathay General Bancorp (NASDAQ: CATY) and Walker & Dunlop (NYSE:WD) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, valuation and earnings.
Institutional and Insider Ownership
68.0% of Cathay General Bancorp shares are held by institutional investors. Comparatively, 77.1% of Walker & Dunlop shares are held by institutional investors. 5.8% of Cathay General Bancorp shares are held by company insiders. Comparatively, 11.7% of Walker & Dunlop shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of current ratings and target prices for Cathay General Bancorp and Walker & Dunlop, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cathay General Bancorp||0||3||3||0||2.50|
|Walker & Dunlop||0||2||1||0||2.33|
Cathay General Bancorp presently has a consensus price target of $41.33, indicating a potential downside of 0.66%. Walker & Dunlop has a consensus price target of $44.00, indicating a potential downside of 18.12%. Given Cathay General Bancorp’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Cathay General Bancorp is more favorable than Walker & Dunlop.
Cathay General Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 2.0%. Walker & Dunlop does not pay a dividend. Cathay General Bancorp pays out 34.1% of its earnings in the form of a dividend.
Risk and Volatility
Cathay General Bancorp has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Walker & Dunlop has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.
Valuation & Earnings
This table compares Cathay General Bancorp and Walker & Dunlop’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Cathay General Bancorp||$532.44 million||6.32||$175.09 million||$2.46||16.91|
|Walker & Dunlop||$575.28 million||2.92||$113.89 million||$4.55||11.81|
Cathay General Bancorp has higher revenue, but lower earnings than Walker & Dunlop. Walker & Dunlop is trading at a lower price-to-earnings ratio than Cathay General Bancorp, indicating that it is currently the more affordable of the two stocks.
This table compares Cathay General Bancorp and Walker & Dunlop’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cathay General Bancorp||33.87%||10.60%||1.36%|
|Walker & Dunlop||21.91%||22.86%||5.38%|
Cathay General Bancorp Company Profile
Cathay General Bancorp is a bank holding company. The Company holds Cathay Bank, a California state-chartered commercial bank (the Bank); seven limited partnerships investing in affordable housing investments; GBC Venture Capital, Inc., and Asia Realty Corp. The Company also owns the common stock of five statutory business trusts created for issuing capital securities. The Bank primarily services individuals, professionals and small to medium-sized businesses in the local markets and provides commercial mortgage loans, commercial loans, small business administration (SBA) loans, residential mortgage loans, real estate construction loans, home equity lines of credit and installment loans to individuals for automobile, household and other consumer expenditures. The Bank offers passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, college certificates of deposit and public funds deposits.
Walker & Dunlop Company Profile
Walker & Dunlop, Inc. is a holding company, which conducts its operations through Walker & Dunlop, LLC. The Company provides commercial real estate financial products and services primarily to developers and owners of multifamily properties. The Company originates, sells and services a range of multifamily and other commercial real estate financing products, including Multifamily Finance, Federal Housing Administration (FHA) Finance, Capital Markets, and Proprietary Capital. It originates and sells loans through the programs of the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac, and together with Fannie Mae, the government-sponsored enterprises (GSEs)), the Government National Mortgage Association (Ginnie Mae) and the Federal Housing Administration, a division of the United States Department of Housing and Urban Development (together with Ginnie Mae, HUD).
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