Eagle Financial Services (NASDAQ:EFSI – Get Free Report) and Hope Bancorp (NASDAQ:HOPE – Get Free Report) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.
Profitability
This table compares Eagle Financial Services and Hope Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Eagle Financial Services | 15.16% | 8.38% | 0.85% |
| Hope Bancorp | 12.53% | 5.71% | 0.70% |
Dividends
Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 2.7%. Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 4.2%. Eagle Financial Services pays out 35.8% of its earnings in the form of a dividend. Hope Bancorp pays out 56.0% 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. Eagle Financial Services has raised its dividend for 14 consecutive years.
Institutional & Insider Ownership
0.3% of Eagle Financial Services shares are owned by institutional investors. Comparatively, 84.0% of Hope Bancorp shares are owned by institutional investors. 7.1% of Eagle Financial Services shares are owned by company insiders. Comparatively, 2.3% of Hope Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a summary of current ratings and price targets for Eagle Financial Services and Hope Bancorp, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Eagle Financial Services | 0 | 3 | 2 | 1 | 2.67 |
| Hope Bancorp | 0 | 3 | 3 | 0 | 2.50 |
Eagle Financial Services presently has a consensus price target of $43.75, indicating a potential downside of 4.37%. Hope Bancorp has a consensus price target of $15.50, indicating a potential upside of 15.67%. Given Hope Bancorp’s higher probable upside, analysts clearly believe Hope Bancorp is more favorable than Eagle Financial Services.
Valuation & Earnings
This table compares Eagle Financial Services and Hope Bancorp”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Eagle Financial Services | $105.89 million | 2.34 | $8.21 million | $3.46 | 13.22 |
| Hope Bancorp | $967.63 million | 1.77 | $61.59 million | $1.00 | 13.40 |
Hope Bancorp has higher revenue and earnings than Eagle Financial Services. Eagle Financial Services is trading at a lower price-to-earnings ratio than Hope Bancorp, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Eagle Financial Services has a beta of 0.21, meaning that its share price is 79% less volatile than the S&P 500. Comparatively, Hope Bancorp has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.
Summary
Eagle Financial Services beats Hope Bancorp on 11 of the 18 factors compared between the two stocks.
About Eagle Financial Services
Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke County that provides various retail and commercial banking products and services in the Shenandoah Valley and Northern Virginia. The company’s deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers personal and retirement plan services; investment services comprising tax-deferred annuities, IRAs and rollovers, mutual funds, retirement plans, college savings plans, life insurance, long term care insurance, fixed income investing, brokerage CDs, and full service or discount brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through twelve full-service branches, two loan production offices, one wealth management office, and one drive-through only facility, as well as 13 ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, Virginia.
About Hope Bancorp
Hope Bancorp, Inc. operates as the bank holding company for Bank of Hope that provides retail and commercial banking services for businesses and individuals in the United States. It accepts personal and business checking, money market, savings, time deposit, and individual retirement accounts. The company also offers loans comprising commercial and industrial loans to businesses for various purposes, such as working capital, purchasing inventory, debt refinancing, business acquisitions, international trade finance, other business-related financing, and loans syndication services; commercial real estate loans; residential mortgage loans; small business administration loans; and consumer loans, such as single-family mortgage, home equity, automobile, credit card, and personal loans. In addition, it provides internet banking and bill-pay, remote deposit capture, lock box, and ACH origination services; treasury management services; foreign currency exchange transactions; interest rate contracts and wealth management services; automated teller machine services; and engages in investment activities. Hope Bancorp, Inc. was founded in 1986 and is headquartered in Los Angeles, California.
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