Avidbank (OTCMKTS:AVBH) vs. East West Bancorp (NASDAQ:EWBC) Financial Survey

East West Bancorp (NASDAQ:EWBC) and Avidbank (OTCMKTS:AVBH) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, profitability, dividends and risk.

Institutional and Insider Ownership

89.5% of East West Bancorp shares are held by institutional investors. Comparatively, 15.9% of Avidbank shares are held by institutional investors. 1.0% of East West Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

East West Bancorp has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, Avidbank has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
East West Bancorp	27.16%	15.55%	1.63%
Avidbank	14.31%	N/A	N/A

Valuation and Earnings

This table compares East West Bancorp and Avidbank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
East West Bancorp	$4.53 billion	3.52	$1.17 billion	$9.07	12.79
Avidbank	$47.45 million	6.29	$21.01 million	($1.82)	-14.98

East West Bancorp has higher revenue and earnings than Avidbank. Avidbank 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.

Analyst Ratings

This is a breakdown of recent recommendations for East West Bancorp and Avidbank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
East West Bancorp	1	4	11	0	2.63
Avidbank	0	0	1	0	3.00

East West Bancorp currently has a consensus price target of $125.08, suggesting a potential upside of 7.82%. Avidbank has a consensus price target of $25.00, suggesting a potential downside of 8.32%. Given East West Bancorp’s higher probable upside, equities research analysts clearly believe East West Bancorp is more favorable than Avidbank.

Summary

East West Bancorp beats Avidbank on 12 of the 14 factors compared between the two stocks.

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.

About Avidbank

Avidbank Holdings, Inc. operates as a bank holding company for Avidbank that provides financial products and services to businesses and individuals in the Santa Clara, San Mateo, and San Francisco counties. The company offers business and personal deposit products, such as checking, money market, and savings accounts; and certificates of deposit. It also provides personal lending products, including secured and unsecured lines of credit, home equity lines of credit, remodel and new home construction loans, and term loans; corporate banking comprising working capital lines of credit, equipment loans, acquisition financing, shareholder buyouts, ESOP loans, and owner-occupied real estate loans; and commercial real estate lending, such as permanent loans and bridge financing products. In addition, the company offers construction lending products, including land acquisition loans, pre-development loans, construction spec SFD, owner-occupied SFD, condominiums, subdivision, unsecured business lines, real estate bridge loans, and RLOC real estate secured loans. Further, it provides various financing solutions, such as fund finance, structured finance, venture lending, asset-based lending, and sponsor finance. Additionally, the company offers various services, such as automated clearing house payments and collections, bill pay, positive pay, wire transfer, lockbox, merchant, remote deposit capture, risk and fraud analytics services, ATM/debit cards, credit cards, business courier, cash management, and complimentary notary services. Furthermore, it offers online and mobile banking services. The company was founded in 2003 and is headquartered in San Jose, California.