Contrasting Cathay General Bancorp (NASDAQ:CATY) and Peoples Bancorp of North Carolina (NASDAQ:PEBK)

Peoples Bancorp of North Carolina (NASDAQ:PEBK) and Cathay General Bancorp (NASDAQ:CATY) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.

Dividends

Peoples Bancorp of North Carolina pays an annual dividend of $0.84 per share and has a dividend yield of 1.9%. Cathay General Bancorp pays an annual dividend of $1.52 per share and has a dividend yield of 2.4%. Peoples Bancorp of North Carolina pays out 20.9% of its earnings in the form of a dividend. Cathay General Bancorp pays out 28.0% 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. Peoples Bancorp of North Carolina has increased its dividend for 1 consecutive years.

Earnings and Valuation

This table compares Peoples Bancorp of North Carolina and Cathay General Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peoples Bancorp of North Carolina	$114.60 million	2.10	$19.83 million	$4.02	10.95
Cathay General Bancorp	$1.38 billion	3.10	$315.12 million	$5.42	11.88

Cathay General Bancorp has higher revenue and earnings than Peoples Bancorp of North Carolina. Peoples Bancorp of North Carolina 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.

Profitability

This table compares Peoples Bancorp of North Carolina and Cathay General Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peoples Bancorp of North Carolina	18.93%	13.84%	1.27%
Cathay General Bancorp	25.32%	12.14%	1.48%

Volatility & Risk

Peoples Bancorp of North Carolina has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500. Comparatively, Cathay General Bancorp has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Insider and Institutional Ownership

43.8% of Peoples Bancorp of North Carolina shares are held by institutional investors. Comparatively, 75.0% of Cathay General Bancorp shares are held by institutional investors. 14.5% of Peoples Bancorp of North Carolina shares are held by company insiders. Comparatively, 4.5% of Cathay General Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Peoples Bancorp of North Carolina and Cathay General Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peoples Bancorp of North Carolina	0	0	0	1	4.00
Cathay General Bancorp	1	5	1	0	2.00

Cathay General Bancorp has a consensus target price of $62.25, indicating a potential downside of 3.34%. Given Cathay General Bancorp’s higher possible upside, analysts clearly believe Cathay General Bancorp is more favorable than Peoples Bancorp of North Carolina.

Summary

Cathay General Bancorp beats Peoples Bancorp of North Carolina on 12 of the 18 factors compared between the two stocks.

About Peoples Bancorp of North Carolina

Peoples Bancorp of North Carolina, Inc. operates as the bank holding company for Peoples Bank that provides various banking products and services for individuals and small-to medium-sized businesses. It offers checking, savings, money market, and retirement accounts; certificates of deposits; and credit and debit cards. The company also originates commercial real estate loans, commercial loans, construction and land development loans, and residential mortgage loans; and individual taxpayer identification number mortgage loans, as well as agricultural loans. In addition, it provides investment counseling and non-deposit investment products, such as stocks, bonds, mutual funds, tax deferred annuities, and related brokerage services; and real estate appraisal and brokerage services. Further, the company operates as a clearing-house for the provision of appraisal services for community banks; and acquires, manages, and disposes real property, other collateral, and other assets obtained in the ordinary course of collecting debts. Peoples Bancorp of North Carolina, Inc. was founded in 1912 and is headquartered in Newton, North Carolina.

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.