Contrasting Hingham Institution for Savings (HIFS) & Cathay General Bancorp (CATY)

Hingham Institution for Savings (NASDAQ: HIFS) and Cathay General Bancorp (NASDAQ:CATY) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Hingham Institution for Savings and Cathay General Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hingham Institution for Savings 0 0 0 0 N/A
Cathay General Bancorp 0 5 2 0 2.29

Cathay General Bancorp has a consensus price target of $44.86, indicating a potential upside of 8.38%. Given Cathay General Bancorp’s higher probable upside, analysts clearly believe Cathay General Bancorp is more favorable than Hingham Institution for Savings.

Volatility and Risk

Hingham Institution for Savings has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, Cathay General Bancorp has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Dividends

Hingham Institution for Savings pays an annual dividend of $1.36 per share and has a dividend yield of 0.7%. Cathay General Bancorp pays an annual dividend of $0.96 per share and has a dividend yield of 2.3%. Hingham Institution for Savings pays out 11.5% of its earnings in the form of a dividend. Cathay General Bancorp pays out 44.0% 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.

Insider & Institutional Ownership

28.5% of Hingham Institution for Savings shares are held by institutional investors. Comparatively, 67.8% of Cathay General Bancorp shares are held by institutional investors. 5.8% of Cathay General Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Hingham Institution for Savings and Cathay General Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hingham Institution for Savings 31.23% N/A N/A
Cathay General Bancorp 28.74% 10.47% 1.34%

Earnings & Valuation

This table compares Hingham Institution for Savings and Cathay General Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hingham Institution for Savings $82.47 million 5.13 $25.76 million $11.83 16.94
Cathay General Bancorp $612.45 million 5.47 $176.04 million $2.18 18.99

Cathay General Bancorp has higher revenue and earnings than Hingham Institution for Savings. Hingham Institution for Savings 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.

Summary

Cathay General Bancorp beats Hingham Institution for Savings on 12 of the 15 factors compared between the two stocks.

About Hingham Institution for Savings

Hingham Institution for Savings (the Bank) is a Massachusetts-chartered savings bank (the Bank). The Bank is principally engaged in the business of residential and commercial real estate mortgage lending, funded by a retail deposit network and borrowings. The Bank provides a range of financial services to individuals and small businesses through its approximately 10 offices in Boston and southeastern Massachusetts. Its primary deposit products are savings, checking, and term certificate accounts, and its primary lending products are residential and commercial mortgage loans secured by properties in Eastern Massachusetts. The Bank offers personal checking accounts, money market and savings accounts, as well as longer term certificates of deposit for individuals, businesses, non-profits, cities and towns. The Bank’s loan portfolio includes residential real estate, commercial real estate, construction, home equity, commercial and consumer segments.

About Cathay General Bancorp

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.

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