Head-To-Head Analysis: Western Alliance Bancorporation (NYSE:WAL) versus East West Bancorp (NASDAQ:EWBC)

Western Alliance Bancorporation (NYSE:WAL) and East West Bancorp (NASDAQ:EWBC) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, risk, profitability, valuation, dividends, institutional ownership and analyst recommendations.

Insider and Institutional Ownership

79.2% of Western Alliance Bancorporation shares are owned by institutional investors. Comparatively, 89.5% of East West Bancorp shares are owned by institutional investors. 2.7% of Western Alliance Bancorporation shares are owned by company insiders. Comparatively, 0.9% of East West Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Western Alliance Bancorporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.0%. East West Bancorp pays an annual dividend of $3.20 per share and has a dividend yield of 2.5%. Western Alliance Bancorporation pays out 19.6% of its earnings in the form of a dividend. East West Bancorp pays out 32.0% 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. Western Alliance Bancorporation has raised its dividend for 5 consecutive years and East West Bancorp has raised its dividend for 8 consecutive years. East West Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Western Alliance Bancorporation and East West Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Western Alliance Bancorporation	17.03%	13.58%	1.09%
East West Bancorp	29.59%	16.00%	1.73%

Earnings & Valuation

This table compares Western Alliance Bancorporation and East West Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Western Alliance Bancorporation	$3.71 billion	2.41	$969.00 million	$8.59	9.55
East West Bancorp	$4.67 billion	3.80	$1.33 billion	$10.01	12.94

East West Bancorp has higher revenue and earnings than Western Alliance Bancorporation. Western Alliance Bancorporation is trading at a lower price-to-earnings ratio than East West Bancorp, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Western Alliance Bancorporation has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, East West Bancorp has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Western Alliance Bancorporation and East West Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Alliance Bancorporation	0	4	10	0	2.71
East West Bancorp	0	5	10	0	2.67

Western Alliance Bancorporation presently has a consensus price target of $93.07, indicating a potential upside of 13.51%. East West Bancorp has a consensus price target of $134.38, indicating a potential upside of 3.73%. Given Western Alliance Bancorporation’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Western Alliance Bancorporation is more favorable than East West Bancorp.

Summary

East West Bancorp beats Western Alliance Bancorporation on 11 of the 16 factors compared between the two stocks.

About Western Alliance Bancorporation

Western Alliance Bancorporation operates as the bank holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. It operates through Commercial and Consumer Related segments. The company offers deposit products, including checking, savings, and money market accounts, as well as fixed-rate and fixed maturity certificates of deposit accounts; demand deposits; and treasury management and residential mortgage products and services. It also provides commercial and industrial loan products, such as working capital lines of credit, loans to technology companies, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans; commercial real estate loans, which are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties; construction and land development loans for single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments; and consumer loans. In addition, the company provides other financial services, such as internet banking, wire transfers, electronic bill payment and presentment, funds transfer and other digital payment offerings, lock box services, courier, and cash management services. Further, the company holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low-income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona.

About East West Bancorp

East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals in the United States. The company operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. It accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. The company’s loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction finance, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, loan syndication, and equipment financing, as well as financing services for clients to facilitate their business transactions between the United States and Asia. It also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. The company was founded in 1973 and is headquartered in Pasadena, California.