Hope Bancorp (NASDAQ:HOPE) and The PNC Financial Services Group (NYSE:PNC) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, institutional ownership, valuation, dividends, earnings and profitability.
Risk & Volatility
Hope Bancorp has a beta of 1.66, meaning that its share price is 66% more volatile than the S&P 500. Comparatively, The PNC Financial Services Group has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.
Dividends
Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 4.1%. The PNC Financial Services Group pays an annual dividend of $4.60 per share and has a dividend yield of 2.7%. Hope Bancorp pays out 41.5% of its earnings in the form of a dividend. The PNC Financial Services Group pays out 40.4% 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. Hope Bancorp has raised its dividend for 1 consecutive years and The PNC Financial Services Group has raised its dividend for 1 consecutive years.
Profitability
This table compares Hope Bancorp and The PNC Financial Services Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Hope Bancorp | 18.62% | 6.21% | 0.77% |
The PNC Financial Services Group | 38.16% | 5.97% | 0.69% |
Valuation and Earnings
This table compares Hope Bancorp and The PNC Financial Services Group's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Hope Bancorp | $734.47 million | 2.30 | $171.04 million | $1.35 | 10.14 |
The PNC Financial Services Group | $21.62 billion | 3.39 | $5.37 billion | $11.39 | 15.19 |
The PNC Financial Services Group has higher revenue and earnings than Hope Bancorp. Hope Bancorp is trading at a lower price-to-earnings ratio than The PNC Financial Services Group, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
82.7% of Hope Bancorp shares are owned by institutional investors. Comparatively, 80.6% of The PNC Financial Services Group shares are owned by institutional investors. 5.6% of Hope Bancorp shares are owned by insiders. Comparatively, 0.3% of The PNC Financial Services Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of recent ratings and target prices for Hope Bancorp and The PNC Financial Services Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Hope Bancorp | 0 | 2 | 0 | 0 | 2.00 |
The PNC Financial Services Group | 1 | 12 | 8 | 0 | 2.33 |
Hope Bancorp presently has a consensus target price of $8.00, suggesting a potential downside of 41.56%. The PNC Financial Services Group has a consensus target price of $147.7059, suggesting a potential downside of 14.66%. Given The PNC Financial Services Group's stronger consensus rating and higher possible upside, analysts clearly believe The PNC Financial Services Group is more favorable than Hope Bancorp.
Summary
The PNC Financial Services Group beats Hope Bancorp on 9 of the 16 factors compared between the two stocks.