Comparing Republic Bancorp (NASDAQ:RBCAA) and East West Bancorp (NASDAQ:EWBC)

Republic Bancorp (NASDAQ:RBCAA) and East West Bancorp (NASDAQ:EWBC) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Republic Bancorp and East West Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Republic Bancorp	0	1	0	0	2.00
East West Bancorp	0	4	9	0	2.69

Republic Bancorp currently has a consensus target price of $70.00, indicating a potential upside of 11.16%. East West Bancorp has a consensus target price of $106.46, indicating a potential upside of 40.43%. Given East West Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe East West Bancorp is more favorable than Republic Bancorp.

Valuation & Earnings

This table compares Republic Bancorp and East West Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Republic Bancorp	$378.96 million	3.24	$101.37 million	$5.23	12.04
East West Bancorp	$2.57 billion	4.09	$1.17 billion	$8.33	9.10

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

Dividends

Republic Bancorp pays an annual dividend of $1.80 per share and has a dividend yield of 2.9%. East West Bancorp pays an annual dividend of $2.40 per share and has a dividend yield of 3.2%. Republic Bancorp pays out 34.4% of its earnings in the form of a dividend. East West Bancorp pays out 28.8% 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. Republic Bancorp has increased its dividend for 27 consecutive years. East West Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Republic Bancorp has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500. Comparatively, East West Bancorp has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.

Institutional and Insider Ownership

24.4% of Republic Bancorp shares are owned by institutional investors. Comparatively, 89.5% of East West Bancorp shares are owned by institutional investors. 56.4% of Republic Bancorp shares are owned by company insiders. Comparatively, 1.0% of East West Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Republic Bancorp and East West Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Republic Bancorp	20.05%	10.60%	1.51%
East West Bancorp	25.73%	15.71%	1.58%

Summary

East West Bancorp beats Republic Bancorp on 14 of the 17 factors compared between the two stocks.

About Republic Bancorp

Republic Bancorp, Inc. operates as a bank holding company for Republic Bank & Trust Company that provides various banking products and services in the United States. It operates in six segments: Traditional Banking, Warehouse, Mortgage Banking, Tax Refund Solutions, Republic Payment Solutions, and Republic Credit Solutions. The company offers demand, money market accounts, savings, individual retirement accounts, time, brokered, and other certificates of deposit; and retail and commercial mortgage, construction and land development, consumer, aircraft, and marine loans. It also provides credit cards; title insurance and other financial products and services; and private banking, lockbox processing, remote deposit capture, business online banking, account reconciliation, automated clearing house processing, and internet and mobile banking services. In addition, it offers short-term and revolving credit facilities to mortgage bankers through mortgage warehouse lines of credit; mortgage banking; tax refund solutions, which facilitate the receipt and payment of federal and state tax refund products through third-party tax preparers and tax-preparation software providers; payments-related products and services to consumers through third party service providers; and consumer credit products. The company offers its services through full-services banking centers in Kentucky, Indiana, Florida, Ohio, and Tennessee. Republic Bancorp, Inc. was incorporated in 1974 and is headquartered in Louisville, Kentucky.

About East West Bancorp

East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals in the United States. The company operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. It accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. The company’s loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction finance, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, loan syndication, and equipment financing, as well as financing services for clients to facilitate their business transactions between the United States and Asia. It also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. The company was founded in 1973 and is headquartered in Pasadena, California.