Critical Review: Mission Valley Bancorp (OTCMKTS:MVLY) and OP Bancorp (NASDAQ:OPBK)

Mission Valley Bancorp (OTCMKTS:MVLY) and OP Bancorp (NASDAQ:OPBK) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.

Dividends

Mission Valley Bancorp pays an annual dividend of $0.15 per share and has a dividend yield of 0.9%. OP Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 3.4%. Mission Valley Bancorp pays out 8.3% of its earnings in the form of a dividend. OP Bancorp pays out 28.1% 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.

Analyst Ratings

This is a summary of recent ratings and target prices for Mission Valley Bancorp and OP Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mission Valley Bancorp	0	0	0	0	0.00
OP Bancorp	1	2	1	0	2.00

OP Bancorp has a consensus price target of $16.50, indicating a potential upside of 18.03%. Given OP Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe OP Bancorp is more favorable than Mission Valley Bancorp.

Earnings & Valuation

This table compares Mission Valley Bancorp and OP Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mission Valley Bancorp	N/A	N/A	$6.20 million	$1.80	9.72
OP Bancorp	$166.66 million	1.25	$25.66 million	$1.71	8.18

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

Insider and Institutional Ownership

5.7% of Mission Valley Bancorp shares are owned by institutional investors. Comparatively, 53.6% of OP Bancorp shares are owned by institutional investors. 20.4% of OP Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Mission Valley Bancorp and OP Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mission Valley Bancorp	N/A	N/A	N/A
OP Bancorp	15.39%	11.93%	1.00%

Volatility and Risk

Mission Valley Bancorp has a beta of 0.19, suggesting that its stock price is 81% less volatile than the S&P 500. Comparatively, OP Bancorp has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Summary

OP Bancorp beats Mission Valley Bancorp on 12 of the 15 factors compared between the two stocks.

About Mission Valley Bancorp

Mission Valley Bancorp operates as the bank holding company for Mission Valley Bank and Mission SBA Loan Servicing LLC that provides various banking products and services to individuals and corporate customers. The company's deposit products include non-interest-bearing and interest-bearing demand deposits, savings, and time deposits; and certificates of deposit. It also offers accounts receivable loans, advanced restaurant financing loans, commercial loans, real estate loans, small business administration loans, and term loans; consumer loans; and overdraft facilities; as well as credit and debit cards. In addition, the company provides lending services, such as underwriting, processing, closing, servicing, and referral/replacement services to other financial institutions. Mission Valley Bancorp was founded in 2001 and is headquartered in Sun Valley, California.

About OP Bancorp

OP Bancorp operates as the bank holding company for Open Bank that provides banking products and services in California. It offers demand, checking, savings, money market, and time deposit accounts, as well as certificates of deposit. The company also provides commercial real estate, small business administration, commercial and industrial business, single-family residential, term, consumer, and home mortgage loans; trade financing products; and letters of credit, and SWIFT and export advice. In addition, it offers debit and credit card, online transfer and bill payment, electronic delivery of customer statements, and mobile banking solutions for iPhone and Android phones, including remote check deposit with mobile bill pay; direct deposits, cashier's checks, person to person payments, wire transfers, and automated clearing house (ACH) services; and cash management services, including balance reporting, transfers between accounts, wire transfer initiation, ACH origination, and stop payment services, as well as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company operates full branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Gardena, Buena Park, and Santa Clara in California; and Carrollton, Texas; and operates loan production offices in Pleasanton, California; Atlanta, Georgia; Aurora, Colorado; and Lynnwood in Washington. The company was founded in 2005 and is headquartered in Los Angeles, California.