Eastern Bankshares (NASDAQ:EBC – Get Free Report) and OptimumBank (NASDAQ:OPHC – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.
Profitability
This table compares Eastern Bankshares and OptimumBank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Eastern Bankshares | 24.04% | 9.37% | 1.29% |
| OptimumBank | 19.62% | 14.10% | 1.31% |
Valuation and Earnings
This table compares Eastern Bankshares and OptimumBank”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Eastern Bankshares | $1.19 billion | 4.38 | $88.22 million | $1.74 | 13.10 |
| OptimumBank | $58.79 million | 1.97 | $6.28 million | $0.87 | 10.55 |
Eastern Bankshares has higher revenue and earnings than OptimumBank. OptimumBank is trading at a lower price-to-earnings ratio than Eastern Bankshares, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
71.7% of Eastern Bankshares shares are held by institutional investors. Comparatively, 7.4% of OptimumBank shares are held by institutional investors. 1.3% of Eastern Bankshares shares are held by insiders. Comparatively, 18.7% of OptimumBank shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings and target prices for Eastern Bankshares and OptimumBank, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Eastern Bankshares | 0 | 3 | 6 | 0 | 2.67 |
| OptimumBank | 0 | 0 | 3 | 1 | 3.25 |
Eastern Bankshares currently has a consensus target price of $25.00, suggesting a potential upside of 9.70%. OptimumBank has a consensus target price of $6.67, suggesting a potential downside of 27.37%. Given Eastern Bankshares’ higher possible upside, research analysts clearly believe Eastern Bankshares is more favorable than OptimumBank.
Risk and Volatility
Eastern Bankshares has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, OptimumBank has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500.
Summary
Eastern Bankshares beats OptimumBank on 10 of the 15 factors compared between the two stocks.
About Eastern Bankshares
Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.
About OptimumBank
OptimumBank Holdings, Inc. operates as the bank holding company for OptimumBank that provides various consumer and commercial banking services to individuals and businesses. It accepts demand interest-bearing and noninterest-bearing, savings, money market, and NOW accounts, as well as time deposits, wire transfers, ACH services, and certificates of deposit. The company also offers residential and commercial real estate, multi-family real estate, land and construction loans; commercial loans are generally used for working capital purposes or for acquiring equipment, inventory, and furniture; and consumer loans for various purposes, including purchases of automobiles, recreational vehicles, boats, home improvements, lines of credit, personal, and deposit account collateralized loans. In addition, it provides Visa debit and ATM cards; cash management, notary, and night depository services; and direct deposits, money orders, cashier's checks, domestic collections, and banking by mail, as well as internet banking services. The company was founded in 2000 and is based in Fort Lauderdale, Florida.
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