Contrasting PacWest Bancorp (PACW) & OptimumBank (OPHC)

PacWest Bancorp (NASDAQ: OPHC) and OptimumBank (NASDAQ:OPHC) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Volatility and Risk

PacWest Bancorp has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, OptimumBank has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500.

Dividends

PacWest Bancorp pays an annual dividend of $2.40 per share and has a dividend yield of 4.8%. OptimumBank does not pay a dividend. PacWest Bancorp pays out 82.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PacWest Bancorp has raised its dividend for 7 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for PacWest Bancorp and OptimumBank, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PacWest Bancorp 0 5 5 2 2.75
OptimumBank 0 0 0 0 N/A

PacWest Bancorp currently has a consensus price target of $55.80, indicating a potential upside of 10.96%. Given PacWest Bancorp’s higher probable upside, equities analysts plainly believe PacWest Bancorp is more favorable than OptimumBank.

Valuation & Earnings

This table compares PacWest Bancorp and OptimumBank’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PacWest Bancorp $1.18 billion 5.21 $357.81 million $2.92 17.22
OptimumBank $4.76 million 1.65 -$580,000.00 N/A N/A

PacWest Bancorp has higher revenue and earnings than OptimumBank.

Profitability

This table compares PacWest Bancorp and OptimumBank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PacWest Bancorp 33.41% 8.70% 1.74%
OptimumBank 32.55% 45.16% 1.54%

Institutional & Insider Ownership

87.5% of PacWest Bancorp shares are held by institutional investors. Comparatively, 0.0% of OptimumBank shares are held by institutional investors. 1.0% of PacWest Bancorp shares are held by insiders. Comparatively, 11.4% of OptimumBank shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

PacWest Bancorp beats OptimumBank on 12 of the 15 factors compared between the two stocks.

PacWest Bancorp Company Profile

PacWest Bancorp operates as the holding company for Pacific Western Bank, a state chartered bank that provides commercial banking products and services. The company accepts demand, money market, and time deposits. It also provides real estate loans to professional developers and real estate investors for the acquisition, refinancing, and construction of commercial real estate properties; small business administration loans; asset-based loans for working capital needs; venture capital loans to support the start-up operations of entrepreneurial companies; and equipment-secured loans and leases. In addition, the company offers consumer loans comprising personal loans, auto loans, home equity lines of credit, revolving lines of credit, and other loans. Further, it provides international banking and multi-state deposit services; money market sweep products; investment advisory and asset management services; treasury and cash management services; telephone banking, and online and mobile banking services; and foreign exchange and ATM services. The company offers its products and services to small and mid-sized companies, entrepreneurial businesses and their venture capital, private equity investors, professionals, and other individuals. As of February 1, 2018, it had 76 full-service branches located throughout the state of California; and one branch in Durham, North Carolina. The company was formerly known as First Community Bancorp and changed its name to PacWest Bancorp in April 2008. PacWest Bancorp was founded in 1999 and is headquartered in Beverly Hills, California.

OptimumBank Company Profile

OptimumBank Holdings, Inc. operates as the bank holding company for OptimumBank that provides a range of consumer and commercial banking services to individuals and businesses. The company accepts demand interest-bearing and noninterest-bearing, savings, money market, NOW, and time deposit accounts, as well as certificates of deposit; and offers residential and commercial real estate, commercial, and consumer loans, as well as lending lines for working capital needs. It also provides debit and ATM cards; investment, cash management, and notary and night depository services; and direct deposits, money orders, cashier's checks, domestic collections, drive-in tellers, and banking by mail, as well as Internet banking services. In addition, the company engages in holding, managing, and disposing foreclosed real estate. It operates through three banking offices located in Broward County, Florida. OptimumBank Holdings, Inc. was founded in 2000 and is based in Fort Lauderdale, Florida.

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