Cathay General Bancorp (NASDAQ:CATY) Hits New 52-Week High - Should You Buy?

Key Points

• Cathay General Bancorp hit a new 52-week high, trading as high as $56.30 (last $55.73), even as analysts hold a consensus "Hold" rating with an average price target of $52.00 and mixed individual ratings.
• The bank reported an earnings beat (Q quarter EPS $1.29 vs. $1.19 expected) with revenue up 14.4% year-over-year, and recently raised its quarterly dividend to $0.38 (annualized yield ~2.7%) while its board approved a stock buyback authorization.
• Cathay has a market cap of $3.73 billion, a low debt-to-equity ratio (0.04) and a PE of 11.49, with about 75% institutional ownership; several insiders have trimmed positions recently (insider ownership ~4.76%).

Cathay General Bancorp (NASDAQ:CATY - Get Free Report) reached a new 52-week high during mid-day trading on Wednesday . The stock traded as high as $56.30 and last traded at $55.73, with a volume of 354985 shares. The stock had previously closed at $55.62.

Analysts Set New Price Targets

CATY has been the subject of several recent analyst reports. Keefe, Bruyette & Woods upped their target price on shares of Cathay General Bancorp from $55.00 to $58.00 and gave the stock a "market perform" rating in a research note on Thursday, April 23rd. Piper Sandler boosted their price target on shares of Cathay General Bancorp from $45.00 to $47.00 and gave the stock an "underweight" rating in a report on Monday. Two analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the stock currently has a consensus rating of "Hold" and an average price target of $52.00.

Cathay General Bancorp Stock Performance

The firm has a market capitalization of $3.73 billion, a PE ratio of 11.49 and a beta of 0.82. The company has a debt-to-equity ratio of 0.04, a current ratio of 1.03 and a quick ratio of 1.03. The company's fifty day simple moving average is $51.04 and its 200 day simple moving average is $49.92.

Cathay General Bancorp (NASDAQ:CATY - Get Free Report) last released its quarterly earnings data on Wednesday, April 22nd. The bank reported $1.29 EPS for the quarter, beating the consensus estimate of $1.19 by $0.10. The business had revenue of $213.20 million for the quarter, compared to the consensus estimate of $211.27 million. Cathay General Bancorp had a net margin of 23.79% and a return on equity of 11.37%. The company's revenue was up 14.4% compared to the same quarter last year. During the same period in the prior year, the firm earned $0.98 earnings per share. As a group, equities research analysts expect that Cathay General Bancorp will post 5.16 EPS for the current fiscal year.

Cathay General Bancorp Increases Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Monday, March 9th. Shareholders of record on Thursday, February 26th were issued a dividend of $0.38 per share. This represents a $1.52 annualized dividend and a yield of 2.7%. This is a boost from Cathay General Bancorp's previous quarterly dividend of $0.34. The ex-dividend date of this dividend was Thursday, February 26th. Cathay General Bancorp's payout ratio is currently 31.34%.

Cathay General Bancorp announced that its board has approved a stock buyback plan on Thursday, April 23rd that allows the company to buyback $150,000.00 billion in outstanding shares. This buyback authorization allows the bank to repurchase up to 4,164,630.6% of its shares through open market purchases. Shares buyback plans are usually an indication that the company's leadership believes its shares are undervalued.

Insider Activity

In other Cathay General Bancorp news, CEO Chang Liu sold 4,836 shares of the company's stock in a transaction dated Monday, April 6th. The shares were sold at an average price of $50.35, for a total transaction of $243,492.60. Following the sale, the chief executive officer directly owned 127,819 shares of the company's stock, valued at $6,435,686.65. This represents a 3.65% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Thomas M. Lo sold 1,000 shares of the company's stock in a transaction dated Thursday, January 29th. The shares were sold at an average price of $50.23, for a total transaction of $50,230.00. Following the sale, the executive vice president directly owned 2,000 shares in the company, valued at approximately $100,460. This trade represents a 33.33% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 4.76% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Cathay General Bancorp

Several hedge funds and other institutional investors have recently modified their holdings of the stock. ProShare Advisors LLC increased its position in shares of Cathay General Bancorp by 1.5% during the fourth quarter. ProShare Advisors LLC now owns 12,925 shares of the bank's stock valued at $625,000 after buying an additional 196 shares during the period. Access Investment Management LLC increased its position in shares of Cathay General Bancorp by 1.2% during the third quarter. Access Investment Management LLC now owns 21,145 shares of the bank's stock valued at $1,015,000 after buying an additional 255 shares during the period. Hantz Financial Services Inc. increased its position in shares of Cathay General Bancorp by 36.0% during the third quarter. Hantz Financial Services Inc. now owns 979 shares of the bank's stock valued at $47,000 after buying an additional 259 shares during the period. CANADA LIFE ASSURANCE Co increased its position in shares of Cathay General Bancorp by 0.5% during the fourth quarter. CANADA LIFE ASSURANCE Co now owns 57,646 shares of the bank's stock valued at $2,788,000 after buying an additional 301 shares during the period. Finally, Arizona State Retirement System increased its position in shares of Cathay General Bancorp by 1.6% during the third quarter. Arizona State Retirement System now owns 19,703 shares of the bank's stock valued at $946,000 after buying an additional 307 shares during the period. 75.01% of the stock is currently owned by institutional investors.

About Cathay General Bancorp

Cathay General Bancorp is a bank holding company headquartered in Los Angeles, California, trading on NASDAQ under the symbol CATY. Its principal subsidiary, Cathay Bank, provides a full suite of financial services to commercial, institutional and retail clients. As a community-focused institution, the company emphasizes relationship banking and tailored solutions for businesses and individuals.

Founded in 1962 by a group of Chinese American entrepreneurs, Cathay has expanded from a single branch operation in downtown Los Angeles into one of the largest Asian-American banks in the United States.

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