Contrasting East West Bancorp (NASDAQ:EWBC) and California Business Bank (OTCMKTS:CABB)

East West Bancorp (NASDAQ:EWBC) and California Business Bank (OTCMKTS:CABB) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, analyst recommendations, valuation and risk.

Profitability

This table compares East West Bancorp and California Business Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
East West Bancorp	25.40%	16.64%	1.64%
California Business Bank	N/A	N/A	N/A

Insider and Institutional Ownership

89.5% of East West Bancorp shares are held by institutional investors. 1.0% of East West Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

East West Bancorp has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500. Comparatively, California Business Bank has a beta of 0.05, indicating that its stock price is 95% less volatile than the S&P 500.

Valuation & Earnings

This table compares East West Bancorp and California Business Bank’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
East West Bancorp	$2.54 billion	4.43	$1.16 billion	$7.94	10.18
California Business Bank	N/A	N/A	N/A	N/A	N/A

East West Bancorp has higher revenue and earnings than California Business Bank.

Analyst Ratings

This is a breakdown of current recommendations and price targets for East West Bancorp and California Business Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
East West Bancorp	0	1	13	0	2.93
California Business Bank	0	0	0	0	N/A

East West Bancorp presently has a consensus target price of $89.53, indicating a potential upside of 10.73%. Given East West Bancorp’s higher possible upside, analysts clearly believe East West Bancorp is more favorable than California Business Bank.

Summary

East West Bancorp beats California Business Bank on 9 of the 9 factors compared between the two stocks.

About East West Bancorp

East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals in the United States. The company operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. It accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. The company's loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction finance, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, loan syndication, and equipment financing, as well as financing services for clients to facilitate their business transactions between the United States and Asia. It also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. The company was incorporated in 1998 and is headquartered in Pasadena, California.

About California Business Bank

California Business Bank provides various financial products and services for small businesses and entrepreneurs. The company offers various personal and business deposit products; and business and commercial loans comprising SBA, commercial and industrial, and commercial real estate loans. It also provides online and mobile banking, mobile deposit, bill pay, and other services. The company was founded in 2005 and is headquartered in Irvine, California.