Cathay General Bancorp (NASDAQ:CATY) versus Zions Bancorporation, N.A. (NASDAQ:ZION) Financial Analysis

Cathay General Bancorp (NASDAQ:CATY) and Zions Bancorporation, N.A. (NASDAQ:ZION) are both mid-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Insider and Institutional Ownership

75.0% of Cathay General Bancorp shares are held by institutional investors. Comparatively, 76.8% of Zions Bancorporation, N.A. shares are held by institutional investors. 4.8% of Cathay General Bancorp shares are held by company insiders. Comparatively, 1.8% of Zions Bancorporation, N.A. shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Cathay General Bancorp and Zions Bancorporation, N.A., as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cathay General Bancorp	1	2	3	0	2.33
Zions Bancorporation, N.A.	2	13	4	0	2.11

Cathay General Bancorp presently has a consensus price target of $50.17, indicating a potential upside of 2.58%. Zions Bancorporation, N.A. has a consensus price target of $57.50, indicating a potential upside of 1.76%. Given Cathay General Bancorp’s stronger consensus rating and higher possible upside, equities analysts clearly believe Cathay General Bancorp is more favorable than Zions Bancorporation, N.A..

Earnings and Valuation

This table compares Cathay General Bancorp and Zions Bancorporation, N.A.”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cathay General Bancorp	$1.39 billion	2.47	$285.98 million	$3.96	12.35
Zions Bancorporation, N.A.	$4.99 billion	1.67	$784.00 million	$5.12	11.04

Zions Bancorporation, N.A. has higher revenue and earnings than Cathay General Bancorp. Zions Bancorporation, N.A. is trading at a lower price-to-earnings ratio than Cathay General Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

Cathay General Bancorp pays an annual dividend of $1.36 per share and has a dividend yield of 2.8%. Zions Bancorporation, N.A. pays an annual dividend of $1.72 per share and has a dividend yield of 3.0%. Cathay General Bancorp pays out 34.3% of its earnings in the form of a dividend. Zions Bancorporation, N.A. pays out 33.6% 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. Zions Bancorporation, N.A. has increased its dividend for 12 consecutive years. Zions Bancorporation, N.A. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Cathay General Bancorp has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Zions Bancorporation, N.A. has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Profitability

This table compares Cathay General Bancorp and Zions Bancorporation, N.A.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cathay General Bancorp	20.55%	10.23%	1.25%
Zions Bancorporation, N.A.	16.08%	13.53%	0.92%

Summary

Zions Bancorporation, N.A. beats Cathay General Bancorp on 9 of the 17 factors compared between the two stocks.

About Cathay General Bancorp

Cathay General Bancorp operates as the holding company for Cathay Bank that offers various commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States. The company offers various deposit products, including passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits. It also provides loan products, such as commercial mortgage loans, commercial loans, small business administration loans, residential mortgage loans, real estate construction loans, and home equity lines of credit, as well as installment loans to individuals for household, and other consumer expenditures. In addition, the company offers trade financing, letter of credit, wire transfer, forward currency spot and forward contract, safe deposit, collection, automatic teller machine, Internet banking, investment, and other customary bank services, as well as securities and insurance products. Cathay General Bancorp was founded in 1962 and is headquartered in Los Angeles, California.

About Zions Bancorporation, N.A.

Zions Bancorporation, National Association provides various banking products and related services primarily in the states of Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. It operates through Zions Bank, California Bank & Trust, Amegy Bank, National Bank of Arizona, Nevada State Bank, Vectra Bank Colorado, and The Commerce Bank of Washington segments. The company offers commercial and small business banking services to small- and medium-sized businesses, such as commercial, industrial, and owner-occupied lending and leasing; municipal and public finance services; depository account and cash management services; commercial and small business cards; merchant processing services; corporate trust services; and correspondent banking and international lending services. It also provides capital markets and investment banking services, including loan syndications, foreign exchange services, interest rate derivatives, fixed income securities underwriting, advisory and capital raising, commercial mortgage-backed security conduit lending, and power and project financing; and commercial real estate lending services consisting of term and construction/land development financing for commercial and residential purposes. In addition, the company offers retail banking services comprising residential mortgages, home equity lines of credit, personal lines of credit, installment consumer loans, depository account services, consumer cards, and personal trust services; and wealth management services consisting of investment management, fiduciary and estate, and advanced business succession and estate planning services. The company was formerly known as ZB, National Association and changed its name to Zions Bancorporation, National Association in September 2018. Zions Bancorporation, National Association was founded in 1873 and is headquartered in Salt Lake City, Utah.