Financial Analysis: First Financial Bankshares (NASDAQ:FFIN) vs. OP Bancorp (NASDAQ:OPBK)

OP Bancorp (NASDAQ:OPBK) and First Financial Bankshares (NASDAQ:FFIN) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Insider and Institutional Ownership

53.6% of OP Bancorp shares are held by institutional investors. Comparatively, 69.8% of First Financial Bankshares shares are held by institutional investors. 20.4% of OP Bancorp shares are held by insiders. Comparatively, 4.2% of First Financial Bankshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares OP Bancorp and First Financial Bankshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OP Bancorp	$166.66 million	1.19	$25.66 million	$1.71	7.77
First Financial Bankshares	$833.20 million	5.21	$253.58 million	$1.77	17.12

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

Risk & Volatility

OP Bancorp has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500. Comparatively, First Financial Bankshares has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for OP Bancorp and First Financial Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OP Bancorp	1	2	1	0	2.00
First Financial Bankshares	0	3	1	0	2.25

OP Bancorp presently has a consensus target price of $16.50, suggesting a potential upside of 24.15%. First Financial Bankshares has a consensus target price of $38.00, suggesting a potential upside of 25.41%. Given First Financial Bankshares’ stronger consensus rating and higher probable upside, analysts clearly believe First Financial Bankshares is more favorable than OP Bancorp.

Dividends

OP Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 3.6%. First Financial Bankshares pays an annual dividend of $0.76 per share and has a dividend yield of 2.5%. OP Bancorp pays out 28.1% of its earnings in the form of a dividend. First Financial Bankshares pays out 42.9% 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. First Financial Bankshares has raised its dividend for 15 consecutive years. OP Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares OP Bancorp and First Financial Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OP Bancorp	15.39%	11.93%	1.00%
First Financial Bankshares	30.43%	14.16%	1.72%

Summary

First Financial Bankshares beats OP Bancorp on 13 of the 16 factors compared between the two stocks.

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.

About First Financial Bankshares

First Financial Bankshares, Inc., through its subsidiaries, provides commercial banking products and services in Texas. The company offers checking, savings and time deposits; automated teller machines, drive-in, and night deposit services; safe deposit facilities, remote deposit capture, internet banking, mobile banking, payroll cards, funds transfer, and performing other customary commercial banking services; securities brokerage services; and trust and wealth management services, including wealth management, estates administration, oil and gas management, testamentary trusts, revocable and irrevocable trusts, and agency accounts. It also provides commercial and industrial, municipal, agricultural, construction and development, farm, residential, and consumer auto and non-auto, as well as non-owner occupied and owner occupied commercial real estate loans. In addition, the company offers advisory and specialized services related to asset management, investing, purchasing, advertising, public relations, and technology services. First Financial Bankshares, Inc. was founded in 1890 and is headquartered in Abilene, Texas.