Financial Analysis: East West Bancorp (EWBC) versus The Competition

East West Bancorp (NASDAQ: EWBC) is one of 327 publicly-traded companies in the “Banks” industry, but how does it weigh in compared to its peers? We will compare East West Bancorp to similar businesses based on the strength of its risk, dividends, profitability, valuation, earnings, institutional ownership and analyst recommendations.

Insider and Institutional Ownership

90.5% of East West Bancorp shares are held by institutional investors. Comparatively, 52.5% of shares of all “Banks” companies are held by institutional investors. 0.9% of East West Bancorp shares are held by company insiders. Comparatively, 10.5% of shares of all “Banks” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares East West Bancorp and its peers gross revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
East West Bancorp $1.22 billion N/A 17.31
East West Bancorp Competitors N/A N/A 19.03

East West Bancorp is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Risk & Volatility

East West Bancorp has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500. Comparatively, East West Bancorp’s peers have a beta of 0.78, indicating that their average share price is 22% less volatile than the S&P 500.

Dividends

East West Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 1.3%. East West Bancorp pays out 22.9% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 2.0% and pay out 37.1% of their earnings in the form of a dividend.

Profitability

This table compares East West Bancorp and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
East West Bancorp 34.63% 13.31% 1.34%
East West Bancorp Competitors 18.91% 8.82% 0.93%

Analyst Ratings

This is a breakdown of current recommendations for East West Bancorp and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
East West Bancorp 1 5 3 0 2.22
East West Bancorp Competitors 1980 7868 8064 305 2.37

East West Bancorp currently has a consensus price target of $63.00, suggesting a potential upside of 4.29%. As a group, “Banks” companies have a potential downside of 6.60%. Given East West Bancorp’s higher probable upside, equities research analysts clearly believe East West Bancorp is more favorable than its peers.

Summary

East West Bancorp beats its peers on 8 of the 14 factors compared.

About East West Bancorp

East West Bancorp, Inc. is a bank holding company. The Company’s principal business is to serve as a holding company for East West Bank (the Bank) and other banking or banking-related subsidiaries. The Bank is a California state-chartered bank, which operates in the United States and Greater China. The Bank provides a range of personal and commercial banking services to businesses, business executives, professionals, and other individuals. It operates through three segments: Retail Banking, Commercial Banking and Other. The Retail Banking segment focuses primarily on retail operations through the Bank’s branch network. The Commercial Banking segment primarily generates commercial and industrial (C&I) loans and commercial real estate (CRE) loans through the domestic commercial lending operations in California, New York, Texas, Washington, Massachusetts, Nevada and Georgia, and through the foreign commercial lending operations in China and Hong Kong.

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