Critical Survey: Zions Bancorporation NA (NASDAQ:ZION) versus Hope Bancorp (NASDAQ:HOPE)

Hope Bancorp (NASDAQ:HOPE) and Zions Bancorporation NA (NASDAQ:ZION) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Dividends

Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 3.9%. Zions Bancorporation NA pays an annual dividend of $1.36 per share and has a dividend yield of 3.1%. Hope Bancorp pays out 38.9% of its earnings in the form of a dividend. Zions Bancorporation NA pays out 33.3% 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. Hope Bancorp has raised its dividend for 2 consecutive years and Zions Bancorporation NA has raised its dividend for 6 consecutive years.

Earnings & Valuation

This table compares Hope Bancorp and Zions Bancorporation NA’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hope Bancorp $710.35 million 2.56 $189.59 million $1.44 9.97
Zions Bancorporation NA $3.03 billion 2.55 $884.00 million $4.08 10.70

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

Profitability

This table compares Hope Bancorp and Zions Bancorporation NA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hope Bancorp 23.98% 9.12% 1.15%
Zions Bancorporation NA 26.99% 12.26% 1.25%

Insider & Institutional Ownership

85.4% of Hope Bancorp shares are held by institutional investors. Comparatively, 97.0% of Zions Bancorporation NA shares are held by institutional investors. 5.6% of Hope Bancorp shares are held by insiders. Comparatively, 1.7% of Zions Bancorporation NA shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Hope Bancorp has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500. Comparatively, Zions Bancorporation NA has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Hope Bancorp and Zions Bancorporation NA, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hope Bancorp 0 2 0 0 2.00
Zions Bancorporation NA 1 7 7 0 2.40

Hope Bancorp presently has a consensus target price of $16.00, indicating a potential upside of 11.42%. Zions Bancorporation NA has a consensus target price of $53.00, indicating a potential upside of 21.39%. Given Zions Bancorporation NA’s stronger consensus rating and higher probable upside, analysts clearly believe Zions Bancorporation NA is more favorable than Hope Bancorp.

Summary

Zions Bancorporation NA beats Hope Bancorp on 13 of the 16 factors compared between the two stocks.

About Hope Bancorp

Hope Bancorp, Inc. operates as the bank holding company for Bank of Hope that provides banking services to small and medium-sized businesses and individuals in the United States. The company offers personal and business checking, money market, savings, time deposit, and individual retirement accounts. It also provides commercial loans to businesses for various purposes, such as working capital, purchasing inventory, debt refinancing, business acquisitions, and other business related financing needs; commercial real estate loans; small business administration (SBA) loans; and consumer loans, such as auto, home equity, single-family mortgage, and signature loans. In addition, the company offers trade finance services, including the issuance and negotiation of letters of credit, as well as handles documentary collections; commercial equipment lease financing; and warehouse lines of credit to mortgage loan originators. Further, it provides cash management services, such as remote deposit capture, lock box, and ACH origination services; investment and wealth management services; mobile banking; debit and credit card services; foreign exchanges services, safe deposit boxes, and other customary bank services; and Internet banking and bill-pay services, as well as operates automated teller machines. As of February 27, 2019, the company operated 63 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia, and Alabama; SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California, and Houston; a commercial loan production office in Northern California and Seattle; residential mortgage loan production offices in California; and a representative office in Seoul, Korea. The company was formerly known as BBCN Bancorp, Inc. and changed its name to Hope Bancorp, Inc. in August 2016. Hope Bancorp, Inc. was incorporated in 2000 and is headquartered in Los Angeles, California.

About Zions Bancorporation NA

Zions Bancorporation, National Association provides various banking and related services primarily in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. The company offers community banking services, such as small and medium-sized business and corporate banking; commercial and residential development, construction, and term lending; retail banking; treasury cash management and related products and services; residential mortgage servicing and lending services; trust and wealth management services; capital markets services, including municipal finance advisory and underwriting; and investment services. It also offers personal banking services to individuals, including home mortgages, bankcards, other installment loans, home equity lines of credit, checking accounts, savings accounts, certificates of deposit of various types and maturities, trust services, safe deposit facilities, and Internet and mobile banking services. In addition, the company provides self-directed brokerage services; small business administration lending and secondary market agricultural real estate mortgage loans; corporate trust services for municipalities; and bond transfer, stock transfer, and escrow services. As of December 31, 2018, it operated 433 branches. The company was formerly known as ZB, National Association and changed its name to Zions Bancorporation, National Association in September 2018. Zions Bancorporation, National Association was founded in 1873 and is headquartered in Salt Lake City, Utah.

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