Financial Comparison: Banc of California (NYSE:BANC) and OP Bancorp (NASDAQ:OPBK)

Banc of California (NYSE:BANC) and OP Bancorp (NASDAQ:OPBK) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for Banc of California and OP Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banc of California	0	2	9	1	2.92
OP Bancorp	0	3	1	0	2.25

Banc of California currently has a consensus target price of $20.27, suggesting a potential upside of 12.53%. OP Bancorp has a consensus target price of $16.50, suggesting a potential upside of 20.68%. Given OP Bancorp’s higher possible upside, analysts plainly believe OP Bancorp is more favorable than Banc of California.

Dividends

Banc of California pays an annual dividend of $0.48 per share and has a dividend yield of 2.7%. OP Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 3.5%. Banc of California pays out 40.7% 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. OP Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Banc of California and OP Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banc of California	$1.10 billion	2.45	$228.97 million	$1.18	15.27
OP Bancorp	$166.66 million	1.22	$25.64 million	$1.71	8.00

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

Volatility and Risk

Banc of California has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, OP Bancorp has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500.

Profitability

This table compares Banc of California and OP Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banc of California	12.59%	8.66%	0.76%
OP Bancorp	15.39%	11.75%	0.99%

Insider & Institutional Ownership

86.9% of Banc of California shares are held by institutional investors. Comparatively, 53.6% of OP Bancorp shares are held by institutional investors. 2.7% of Banc of California shares are held by company insiders. Comparatively, 20.4% of OP Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Banc of California beats OP Bancorp on 9 of the 17 factors compared between the two stocks.

About Banc of California

Banc of California, Inc. operates as the bank holding company for Banc of California that provides various banking products and services in California. The company offers deposit products, such as checking, savings, money market, demand, and time deposits; certificates of deposit; retirement accounts; and safe deposit boxes. It also provides real estate loans to professional developers and real estate investors for the acquisition, construction, refinancing, renovation, and on-going operation of commercial real estate properties; commercial real estate mortgage, residential real estate mortgage, and real estate construction and land loans; commercial loans and leases, such as equipment finance, other asset-based, venture capital, secured business, warehouse, and other lending services; small business administration loans; and consumer loans comprising personal, auto, and other loans, as well as home equity and revolving lines of credit. In addition, the company offers international banking, multi-state deposit, and asset and investment management services, as well as cash and treasury management services; and online, mobile, remote deposit, and telephone banking services. It serves small and middle-market businesses, venture capital firms, non-profit organizations, business owners, entrepreneurs, professionals, and high-net worth individuals. Banc of California, Inc. was founded in 1941 and is headquartered in Los Angeles, 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.