Pacific Premier Bancorp (NASDAQ:PPBI) and Western Alliance Bancorporation (NYSE:WAL) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares Pacific Premier Bancorp and Western Alliance Bancorporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pacific Premier Bancorp 24.60% 8.61% 1.33%
Western Alliance Bancorporation 38.48% 16.68% 1.83%

Earnings and Valuation

This table compares Pacific Premier Bancorp and Western Alliance Bancorporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pacific Premier Bancorp $301.12 million 7.69 $60.10 million $1.77 20.96
Western Alliance Bancorporation $890.86 million 6.79 $325.49 million $3.10 18.42

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

Insider and Institutional Ownership

74.6% of Pacific Premier Bancorp shares are owned by institutional investors. Comparatively, 83.9% of Western Alliance Bancorporation shares are owned by institutional investors. 4.6% of Pacific Premier Bancorp shares are owned by insiders. Comparatively, 7.5% of Western Alliance Bancorporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Pacific Premier Bancorp has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Western Alliance Bancorporation has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Pacific Premier Bancorp and Western Alliance Bancorporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pacific Premier Bancorp 0 1 1 0 2.50
Western Alliance Bancorporation 0 1 11 0 2.92

Pacific Premier Bancorp currently has a consensus price target of $49.00, suggesting a potential upside of 32.08%. Western Alliance Bancorporation has a consensus price target of $67.96, suggesting a potential upside of 19.02%. Given Pacific Premier Bancorp’s higher probable upside, equities research analysts clearly believe Pacific Premier Bancorp is more favorable than Western Alliance Bancorporation.

Summary

Western Alliance Bancorporation beats Pacific Premier Bancorp on 11 of the 14 factors compared between the two stocks.

About Pacific Premier Bancorp

Pacific Premier Bancorp, Inc. operates as the bank holding company for Pacific Premier Bank that provides banking services to businesses, professionals, real estate investors, and non-profit organizations. Its deposit products include checking, money market, and savings accounts. The company's loan portfolio comprises commercial business loans, lines of credit, small business administration loans, commercial real estate loans, agribusiness loans, home equity lines of credit, construction loans, farmland, and consumer loans, as well as multi-family residential, one-to-four family real estate, commercial and industrial, and franchise lending; warehouse repurchase facilities; and credit facilities to Home Owners' Associations (HOA) and HOA management companies. It also offers cash management, electronic banking, and online bill payment services. The company conducts business through 33 full-service depository branches in the counties of Orange, Los Angeles, Riverside, San Bernardino, San Diego, San Luis Obispo, and Santa Barbara, California, as well as Clark County, Nevada. Pacific Premier Bancorp, Inc. was founded in 1983 and is headquartered in Irvine, California.

About Western Alliance Bancorporation

Western Alliance Bancorporation operates as the holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. The company offers deposit products, including checking accounts, savings accounts, and money market accounts, as well as fixed-rate and fixed maturity certificates of deposit accounts. It also offers commercial and industrial loan products, such as working capital lines of credit, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans; commercial real estate loans, which are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties; construction and land development loans for single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments; and consumer loans. In addition, the company provides other financial services, such as Internet banking, wire transfers, electronic bill payment and presentment, lock box services, courier, and cash management services. Further, it holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. As of December 31, 2017, the company operated 38 branch locations and 8 loan production offices. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona.

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