East West Bancorp (NASDAQ:EWBC – Get Free Report) and Sierra Bancorp (NASDAQ:BSRR – Get Free Report) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.
Profitability
This table compares East West Bancorp and Sierra Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| East West Bancorp | 25.40% | 16.64% | 1.64% |
| Sierra Bancorp | 17.77% | 10.66% | 0.97% |
Analyst Ratings
This is a breakdown of recent recommendations and price targets for East West Bancorp and Sierra Bancorp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| East West Bancorp | 0 | 1 | 12 | 0 | 2.92 |
| Sierra Bancorp | 0 | 2 | 0 | 0 | 2.00 |
Risk & Volatility
East West Bancorp has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, Sierra Bancorp has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.
Institutional & Insider Ownership
89.5% of East West Bancorp shares are owned by institutional investors. Comparatively, 55.4% of Sierra Bancorp shares are owned by institutional investors. 1.0% of East West Bancorp shares are owned by insiders. Comparatively, 11.9% of Sierra Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Dividends
East West Bancorp pays an annual dividend of $2.20 per share and has a dividend yield of 2.7%. Sierra Bancorp pays an annual dividend of $0.96 per share and has a dividend yield of 3.5%. East West Bancorp pays out 27.7% of its earnings in the form of a dividend. Sierra Bancorp pays out 39.7% 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.
Earnings and Valuation
This table compares East West Bancorp and Sierra Bancorp”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| East West Bancorp | $2.54 billion | 4.55 | $1.16 billion | $7.94 | 10.44 |
| Sierra Bancorp | $122.67 million | 3.27 | $34.84 million | $2.42 | 11.37 |
East West Bancorp has higher revenue and earnings than Sierra Bancorp. East West Bancorp is trading at a lower price-to-earnings ratio than Sierra Bancorp, indicating that it is currently the more affordable of the two stocks.
Summary
East West Bancorp beats Sierra Bancorp on 13 of the 16 factors compared between the two stocks.
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.
About Sierra Bancorp
Sierra Bancorp operates as the bank holding company for Bank of the Sierra that provides retail and commercial banking services to individuals and businesses in California. It accepts various deposit products, such as checking accounts, savings accounts, money market demand accounts, time deposits, retirement accounts, and sweep accounts. The company's loan products include agricultural, commercial, consumer, real estate, construction, and mortgage loans. It also offers automated teller machines; electronic point-of-sale payment alternatives; online and automated telephone banking services; and remote deposit capture and automated payroll services for business customers. Sierra Bancorp was founded in 1977 and is headquartered in Porterville, California.
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