Cathay General Bancorp (NASDAQ:CATY) versus FB Financial (NYSE:FBK) Head to Head Analysis

FB Financial (NYSE:FBK) and Cathay General Bancorp (NASDAQ:CATY) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Volatility and Risk

FB Financial has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Cathay General Bancorp has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Insider & Institutional Ownership

65.4% of FB Financial shares are held by institutional investors. Comparatively, 75.0% of Cathay General Bancorp shares are held by institutional investors. 2.0% of FB Financial 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 large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares FB Financial and Cathay General Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FB Financial	$877.84 million	3.54	$122.62 million	$3.73	16.18
Cathay General Bancorp	$1.38 billion	3.06	$315.12 million	$5.12	12.34

Cathay General Bancorp has higher revenue and earnings than FB Financial. Cathay General Bancorp is trading at a lower price-to-earnings ratio than FB Financial, indicating that it is currently the more affordable of the two stocks.

Dividends

FB Financial pays an annual dividend of $0.84 per share and has a dividend yield of 1.4%. Cathay General Bancorp pays an annual dividend of $1.52 per share and has a dividend yield of 2.4%. FB Financial pays out 22.5% of its earnings in the form of a dividend. Cathay General Bancorp pays out 29.7% 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. FB Financial has increased its dividend for 8 consecutive years.

Profitability

This table compares FB Financial and Cathay General Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FB Financial	19.00%	12.08%	1.44%
Cathay General Bancorp	24.66%	11.71%	1.43%

Analyst Recommendations

This is a summary of recent ratings and target prices for FB Financial and Cathay General Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FB Financial	0	0	6	1	3.14
Cathay General Bancorp	1	3	1	1	2.33

FB Financial currently has a consensus target price of $64.67, suggesting a potential upside of 7.16%. Cathay General Bancorp has a consensus target price of $62.25, suggesting a potential downside of 1.49%. Given FB Financial’s stronger consensus rating and higher possible upside, analysts clearly believe FB Financial is more favorable than Cathay General Bancorp.

Summary

FB Financial beats Cathay General Bancorp on 10 of the 17 factors compared between the two stocks.

About FB Financial

FB Financial Corporation operates as a bank holding company for FirstBank that provides a suite of commercial and consumer banking services to businesses, professionals, and individuals. The company operates in segments, such as Banking and Mortgage. It offers checking, demand, money market, and savings accounts; deposit and lending products and services to corporate, commercial, and consumer customers; and time deposits and certificates of deposits, as well as residential mortgage loans. The company also provides owner-occupied and non-owner-occupied real estate commercial, residential real estate 1-4 family mortgage, multi-family residential, commercial and industrial, construction, land acquisition, residential lines of credit, and land development loans; and consumer and other loans, such as car, boat, and other recreational vehicle loans, as well as manufactured homes without real estate and personal lines of credit. In addition, the company offers mortgage banking services through its bank branch network and mortgage banking offices in the southeastern United States; direct-to-consumer internet delivery channel; and trust, insurance, and investment services, as well as online and mobile banking services. The company operates full-service bank branches and limited-service branches locations throughout Tennessee, Nashville, Chattanooga, Knoxville, Memphis, Jackson, Birmingham, Florence, Huntsville, Alabama, Bowling Green, and Kentucky; and mortgage offices throughout the southeastern United States. The company was formerly known as First South Bancorp, Inc. and changed its name to FB Financial Corporation in 2016. FB Financial Corporation was founded in 1906 and is headquartered in Nashville, Tennessee.

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.