Head to Head Survey: WesBanco (NASDAQ:WSBC) versus Hope Bancorp (NASDAQ:HOPE)

Hope Bancorp (NASDAQ:HOPE) and WesBanco (NASDAQ:WSBC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Hope Bancorp and WesBanco, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hope Bancorp 0 2 0 0 2.00
WesBanco 0 4 2 0 2.33

Hope Bancorp presently has a consensus price target of $8.00, suggesting a potential downside of 47.12%. WesBanco has a consensus price target of $29.90, suggesting a potential downside of 17.38%. Given WesBanco’s stronger consensus rating and higher probable upside, analysts clearly believe WesBanco is more favorable than Hope Bancorp.

Dividends

Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 3.7%. WesBanco pays an annual dividend of $1.32 per share and has a dividend yield of 3.6%. Hope Bancorp pays out 41.5% of its earnings in the form of a dividend. WesBanco pays out 43.1% 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 increased its dividend for 1 consecutive years and WesBanco has increased its dividend for 10 consecutive years. Hope Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Hope Bancorp and WesBanco’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hope Bancorp $734.47 million 2.54 $171.04 million $1.35 11.21
WesBanco $600.97 million 4.05 $158.87 million $3.06 11.83

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

Profitability

This table compares Hope Bancorp and WesBanco’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%
WesBanco 15.84% 4.73% 0.76%

Risk and Volatility

Hope Bancorp has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500. Comparatively, WesBanco has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Insider & Institutional Ownership

82.7% of Hope Bancorp shares are owned by institutional investors. Comparatively, 57.2% of WesBanco shares are owned by institutional investors. 5.6% of Hope Bancorp shares are owned by insiders. Comparatively, 3.1% of WesBanco shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Hope Bancorp beats WesBanco on 10 of the 17 factors compared between the two stocks.

Hope Bancorp Company Profile

Hope Bancorp, Inc. operates as the bank holding company for Bank of Hope that provides banking services for small and medium-sized businesses, and individuals in the United States. The company accepts personal and business checking, money market, savings, time deposit, and individual retirement accounts. Its loan products include commercial loans to businesses for various purposes, such as working capital, purchasing inventory, debt refinancing, business acquisitions, and other business related financing needs; real estate loans; small business administration loans; and consumer loans, such as single-family mortgage, home equity, auto, credit card, and personal loans. The company also offers trade finance services, including the issuance and negotiation of letters of credit, as well as handles documentary collections; warehouse lines of credit to mortgage loan originators; and commercial equipment lease financing. In addition, it provides cash management services, such as remote deposit capture, lock box, and ACH origination services; investment and wealth management services; mobile banking services; debit card services; foreign exchanges services, safe deposit boxes, and other customary bank services; internet banking services; and automated teller machine services. As of January 26, 2021, the company operated 58 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, and Alabama; SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California, and Houston; commercial loan production office in Northern California and Seattle; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. The company was formerly known as BBCN Bancorp, Inc. and changed its name to Hope Bancorp, Inc. in August 2016. Hope Bancorp, Inc. was incorporated in 2000 and is headquartered in Los Angeles, California.

WesBanco Company Profile

WesBanco, Inc. operates as the bank holding company for WesBanco Bank, Inc. that provides retail banking, corporate banking, personal and corporate trust, brokerage, and mortgage banking and insurance services. It operates in two segments, Community Banking, and Trust and Investment Services. The company offers commercial demand, individual demand, and time deposit accounts; money market accounts; interest bearing and non-interest bearing demand deposits, as well as savings deposits; and certificates of deposit. It also provides commercial real estate loans; commercial and industrial loans; residential real estate loans, including loans to purchase, construct, or refinance borrower's home; home equity lines of credit; installment loans to finance the purchase of automobiles, trucks, motorcycles, boats, and other recreational vehicles, as well as home equity installment loans, unsecured home improvement loans, and revolving lines of credit; and commercial, mortgage, and individual installment loans. In addition, the company offers trust and investment services, as well as various investment products comprising mutual funds and annuities; and securities brokerage services. Further, WesBanco, Inc., through its non-banking subsidiaries, acts as an agency that specializes in property, casualty, life, and title insurance, as well as benefit plan sales and administration to personal and commercial clients; provides broker dealer and discount brokerage services; holds investment securities and loans; and holds and leases commercial real estate properties, as well as acts as an investment adviser to a family of mutual funds. As of December 31, 2020, it operated 233 branches and 226 ATMs in West Virginia, Ohio, western Pennsylvania, Kentucky, southern Indiana, and Maryland, as well as six loan production offices in West Virginia, Ohio, western Pennsylvania, and Maryland. WesBanco, Inc. was founded in 1870 and is headquartered in Wheeling, West Virginia.

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