Contrasting Eagle Bancorp (NASDAQ:EGBN) & Columbia Banking System (NASDAQ:COLB)

Columbia Banking System (NASDAQ:COLB) and Eagle Bancorp (NASDAQ:EGBN) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Risk and Volatility

Columbia Banking System has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, Eagle Bancorp has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.

Insider and Institutional Ownership

92.5% of Columbia Banking System shares are owned by institutional investors. Comparatively, 78.0% of Eagle Bancorp shares are owned by institutional investors. 0.6% of Columbia Banking System shares are owned by insiders. Comparatively, 3.4% of Eagle Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Columbia Banking System and Eagle Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Columbia Banking System	22.83%	11.93%	1.36%
Eagle Bancorp	9.30%	4.66%	0.54%

Dividends

Columbia Banking System pays an annual dividend of $1.48 per share and has a dividend yield of 4.8%. Eagle Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. Columbia Banking System pays out 51.2% of its earnings in the form of a dividend. Eagle Bancorp pays out 2.3% 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. Columbia Banking System has raised its dividend for 4 consecutive years. Columbia Banking System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings for Columbia Banking System and Eagle Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Banking System	0	9	5	0	2.36
Eagle Bancorp	1	2	1	1	2.40

Columbia Banking System presently has a consensus target price of $33.46, suggesting a potential upside of 7.91%. Eagle Bancorp has a consensus target price of $31.00, suggesting a potential downside of 7.38%. Given Columbia Banking System’s higher probable upside, equities analysts clearly believe Columbia Banking System is more favorable than Eagle Bancorp.

Valuation and Earnings

This table compares Columbia Banking System and Eagle Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Banking System	$3.21 billion	2.73	$550.00 million	$2.89	10.73
Eagle Bancorp	$300.66 million	3.39	-$138.05 million	$1.75	19.13

Columbia Banking System has higher revenue and earnings than Eagle Bancorp. Columbia Banking System is trading at a lower price-to-earnings ratio than Eagle Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

Columbia Banking System beats Eagle Bancorp on 11 of the 18 factors compared between the two stocks.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.

About Eagle Bancorp

Eagle Bancorp, Inc. operates as the bank holding company for EagleBank that provides commercial and consumer banking services primarily in the United States. The company also offers various commercial and consumer lending products comprising commercial loans for working capital, equipment purchases, real estate lines of credit, and government contract financing; asset based lending and accounts receivable financing; construction and commercial real estate loans; business equipment financing; consumer home equity lines of credit, personal lines of credit, and term loans; consumer installment loans, such as auto and personal loans; personal credit cards; and residential mortgage loans. In addition, it provides online and mobile banking services; checking and saving accounts; and other deposit services, including cash management services, business sweep accounts, lock boxes, remote deposit captures, account reconciliation services, merchant card services, safety deposit boxes, and automated clearing house origination, as well as after-hours depositories and ATM services. Further, the company offers insurance products and services through a referral program; and treasury management services. The company serves sole proprietors, small and medium-sized businesses, partnerships, corporations, and non-profit organizations and associations, as well as investors. Eagle Bancorp, Inc. was incorporated in 1997 and is headquartered in Bethesda, Maryland.