Critical Contrast: Origin Bancorp (NASDAQ:OBNK) and Cathay General Bancorp (NASDAQ:CATY)

Origin Bancorp (NASDAQ:OBNK) and Cathay General Bancorp (NASDAQ:CATY) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Origin Bancorp and Cathay General Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Origin Bancorp	0	0	0	0	0.00
Cathay General Bancorp	1	2	3	0	2.33

Cathay General Bancorp has a consensus price target of $50.17, suggesting a potential upside of 16.02%. Given Cathay General Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Cathay General Bancorp is more favorable than Origin Bancorp.

Dividends

Origin Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. Cathay General Bancorp pays an annual dividend of $1.36 per share and has a dividend yield of 3.1%. Origin Bancorp pays out 18.7% of its earnings in the form of a dividend. Cathay General Bancorp pays out 34.3% 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. Origin Bancorp has increased its dividend for 4 consecutive years.

Profitability

This table compares Origin Bancorp and Cathay General Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Origin Bancorp	20.47%	10.45%	0.97%
Cathay General Bancorp	20.55%	10.23%	1.25%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Origin Bancorp	$347.14 million	3.02	$87.71 million	$3.21	10.62
Cathay General Bancorp	$742.38 million	4.08	$285.98 million	$3.96	10.92

Cathay General Bancorp has higher revenue and earnings than Origin Bancorp. Origin Bancorp 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.

Institutional & Insider Ownership

47.2% of Origin Bancorp shares are held by institutional investors. Comparatively, 75.0% of Cathay General Bancorp shares are held by institutional investors. 6.2% of Origin Bancorp shares are held by company insiders. Comparatively, 4.9% of Cathay General Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Origin Bancorp has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Cathay General Bancorp has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Summary

Cathay General Bancorp beats Origin Bancorp on 13 of the 17 factors compared between the two stocks.

About Origin Bancorp

Origin Bancorp, Inc. is a bank holding company, which engages in the provision of financial services to small and medium-sized businesses, municipalities, high net worth individuals, and retail clients. The firm’s products and services include lending, deposits, mortgage banking, and insurance. It also offers other banking services such as Internet banking and voice response information, mobile applications, cash management, overdraft protection, direct deposit, safe deposit boxes, U.S. savings bonds, and automatic account transfers. The company was founded in 1991 and is headquartered in Ruston, LA.

About Cathay General Bancorp

Cathay General Bancorp operates as the holding company for Cathay Bank that offers various commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States. The company offers various deposit products, including passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits. It also provides loan products, such as commercial mortgage loans, commercial loans, small business administration loans, residential mortgage loans, real estate construction loans, and home equity lines of credit, as well as installment loans to individuals for household, and other consumer expenditures. In addition, the company offers trade financing, letter of credit, wire transfer, forward currency spot and forward contract, safe deposit, collection, automatic teller machine, Internet banking, investment, and other customary bank services, as well as securities and insurance products. Cathay General Bancorp was founded in 1962 and is headquartered in Los Angeles, California.