Analyzing OptimumBank (NASDAQ:OPHC) & Hope Bancorp (NASDAQ:HOPE)

Hope Bancorp (NASDAQ:HOPE) and OptimumBank (NASDAQ:OPHC) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Institutional & Insider Ownership

84.0% of Hope Bancorp shares are held by institutional investors. Comparatively, 7.4% of OptimumBank shares are held by institutional investors. 5.3% of Hope Bancorp shares are held by company insiders. Comparatively, 13.9% of OptimumBank shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Hope Bancorp and OptimumBank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hope Bancorp	0	2	1	0	2.33
OptimumBank	0	1	0	0	2.00

Hope Bancorp presently has a consensus price target of $12.50, suggesting a potential upside of 3.39%. OptimumBank has a consensus price target of $5.25, suggesting a potential upside of 10.99%. Given OptimumBank’s higher possible upside, analysts clearly believe OptimumBank is more favorable than Hope Bancorp.

Valuation & Earnings

This table compares Hope Bancorp and OptimumBank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hope Bancorp	$492.11 million	2.97	$133.67 million	$0.84	14.39
OptimumBank	$37.20 million	1.28	$6.28 million	$1.32	3.58

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hope Bancorp	9.81%	5.52%	0.65%
OptimumBank	19.62%	14.10%	1.31%

Volatility & Risk

Hope Bancorp has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, OptimumBank has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500.

Summary

Hope Bancorp beats OptimumBank on 8 of the 14 factors compared between the two stocks.

About Hope Bancorp

Hope Bancorp, Inc. operates as the bank holding company for Bank of Hope that provides retail and commercial banking services for businesses and individuals in the United States. It accepts personal and business checking, money market, savings, time deposit, and individual retirement accounts. The company also offers loans comprising commercial and industrial loans to businesses for various purposes, such as working capital, purchasing inventory, debt refinancing, business acquisitions, international trade finance, other business-related financing, and loans syndication services; commercial real estate loans; residential mortgage loans; small business administration loans; and consumer loans, such as single-family mortgage, home equity, automobile, credit card, and personal loans. In addition, it provides internet banking and bill-pay, remote deposit capture, lock box, and ACH origination services; treasury management services; foreign currency exchange transactions; interest rate contracts and wealth management services; automated teller machine services; and engages in investment activities. Hope Bancorp, Inc. was founded in 1986 and is headquartered in Los Angeles, California.

About OptimumBank

OptimumBank Holdings, Inc. operates as the bank holding company for OptimumBank that provides various consumer and commercial banking services to individuals and businesses. It accepts demand interest-bearing and noninterest-bearing, savings, money market, and NOW accounts, as well as time deposits, wire transfers, ACH services, and certificates of deposit. The company also offers residential and commercial real estate, multi-family real estate, land and construction loans; commercial loans are generally used for working capital purposes or for acquiring equipment, inventory, and furniture; and consumer loans for various purposes, including purchases of automobiles, recreational vehicles, boats, home improvements, lines of credit, personal, and deposit account collateralized loans. In addition, it provides Visa debit and ATM cards; cash management, notary, and night depository services; and direct deposits, money orders, cashier's checks, domestic collections, and banking by mail, as well as internet banking services. The company was founded in 2000 and is based in Fort Lauderdale, Florida.