Critical Comparison: OP Bancorp (NASDAQ:OPBK) and International Bancshares (NASDAQ:IBOC)

OP Bancorp (NASDAQ:OPBK) and International Bancshares (NASDAQ:IBOC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for OP Bancorp and International Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OP Bancorp	0	1	0	0	2.00
International Bancshares	0	0	0	0	0.00

OP Bancorp presently has a consensus price target of $18.00, indicating a potential upside of 53.32%. Given OP Bancorp’s stronger consensus rating and higher probable upside, equities analysts plainly believe OP Bancorp is more favorable than International Bancshares.

Institutional and Insider Ownership

53.6% of OP Bancorp shares are owned by institutional investors. Comparatively, 65.9% of International Bancshares shares are owned by institutional investors. 20.4% of OP Bancorp shares are owned by company insiders. Comparatively, 13.4% of International Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

OP Bancorp has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, International Bancshares has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Valuation and Earnings

This table compares OP Bancorp and International Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OP Bancorp	$154.05 million	1.13	$21.07 million	$1.42	8.27
International Bancshares	$1.04 billion	3.75	$409.17 million	$6.57	9.59

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

Profitability

This table compares OP Bancorp and International Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OP Bancorp	13.61%	10.51%	0.90%
International Bancshares	39.30%	14.84%	2.58%

Dividends

OP Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 4.1%. International Bancshares pays an annual dividend of $1.40 per share and has a dividend yield of 2.2%. OP Bancorp pays out 33.8% of its earnings in the form of a dividend. International Bancshares pays out 21.3% 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. International Bancshares has increased its dividend for 16 consecutive years.

Summary

International Bancshares beats OP Bancorp on 12 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 International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services in Texas and the State of Oklahoma. It accepts checking and saving deposits; and offers commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The company also provides international banking services, including letters of credit, commercial and industrial loans, and foreign exchange services. In addition, it offers other banking related services, such as credit cards, safety deposit boxes, collection, notary public, escrow, drive up and walk up facilities, and other customary banking services; and Internet banking services, as well as securities products through third party providers. The company was founded in 1966 and is headquartered in Laredo, Texas.