OP Bancorp (NASDAQ:OPBK) versus Prosperity Bancshares (NYSE:PB) Financial Survey

Prosperity Bancshares (NYSE:PB) and OP Bancorp (NASDAQ:OPBK) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Earnings & Valuation

This table compares Prosperity Bancshares and OP Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prosperity Bancshares	$1.19 billion	5.21	$479.39 million	$5.61	11.64
OP Bancorp	$91.75 million	2.05	$21.07 million	$1.57	8.07

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

Volatility and Risk

Prosperity Bancshares has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, OP Bancorp has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Prosperity Bancshares and OP Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prosperity Bancshares	0	6	11	0	2.65
OP Bancorp	0	2	1	1	2.75

Prosperity Bancshares currently has a consensus target price of $80.21, suggesting a potential upside of 22.82%. OP Bancorp has a consensus target price of $16.50, suggesting a potential upside of 30.28%. Given OP Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe OP Bancorp is more favorable than Prosperity Bancshares.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Prosperity Bancshares	30.28%	7.06%	1.37%
OP Bancorp	14.42%	11.09%	0.94%

Institutional & Insider Ownership

80.7% of Prosperity Bancshares shares are owned by institutional investors. Comparatively, 53.6% of OP Bancorp shares are owned by institutional investors. 4.2% of Prosperity Bancshares shares are owned by insiders. Comparatively, 20.4% of OP Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Prosperity Bancshares pays an annual dividend of $2.40 per share and has a dividend yield of 3.7%. OP Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 3.8%. Prosperity Bancshares pays out 42.8% of its earnings in the form of a dividend. OP Bancorp pays out 30.6% 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. Prosperity Bancshares has increased its dividend for 27 consecutive years. OP Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Prosperity Bancshares beats OP Bancorp on 11 of the 18 factors compared between the two stocks.

About Prosperity Bancshares

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; term loans and lines of credit; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. The company was incorporated in 1983 and is headquartered in Houston, Texas.

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.