Contrasting Cathay General Bancorp (NASDAQ:CATY) & Farmers National Banc (NASDAQ:FMNB)

Cathay General Bancorp (NASDAQ:CATY) and Farmers National Banc (NASDAQ:FMNB) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, analyst recommendations, institutional ownership and dividends.

Dividends

Cathay General Bancorp pays an annual dividend of $1.36 per share and has a dividend yield of 3.3%. Farmers National Banc pays an annual dividend of $0.68 per share and has a dividend yield of 4.6%. Cathay General Bancorp pays out 30.1% of its earnings in the form of a dividend. Farmers National Banc pays out 46.9% 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.

Valuation & Earnings

This table compares Cathay General Bancorp and Farmers National Banc”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cathay General Bancorp	$1.31 billion	2.28	$354.12 million	$4.52	9.14
Farmers National Banc	$255.20 million	2.19	$49.93 million	$1.45	10.28

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

Profitability

This table compares Cathay General Bancorp and Farmers National Banc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cathay General Bancorp	22.08%	11.96%	1.41%
Farmers National Banc	19.50%	14.55%	1.09%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Cathay General Bancorp and Farmers National Banc, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cathay General Bancorp	1	2	1	0	2.00
Farmers National Banc	0	2	1	0	2.33

Cathay General Bancorp presently has a consensus price target of $43.00, suggesting a potential upside of 4.04%. Farmers National Banc has a consensus price target of $15.67, suggesting a potential upside of 5.15%. Given Farmers National Banc’s stronger consensus rating and higher probable upside, analysts plainly believe Farmers National Banc is more favorable than Cathay General Bancorp.

Risk & Volatility

Cathay General Bancorp has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Farmers National Banc has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.

Institutional and Insider Ownership

75.0% of Cathay General Bancorp shares are owned by institutional investors. Comparatively, 38.7% of Farmers National Banc shares are owned by institutional investors. 4.8% of Cathay General Bancorp shares are owned by company insiders. Comparatively, 4.0% of Farmers National Banc shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Cathay General Bancorp beats Farmers National Banc on 10 of the 15 factors compared between the two stocks.

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.

About Farmers National Banc

Farmers National Banc Corp. operates as a bank holding company for The Farmers National Bank of Canfield engages in the banking, trust, retirement consulting, insurance, and financial management businesses. It offers commercial and retail banking services, including checking, savings, and time deposit accounts; commercial, mortgage and installment, and home equity loans; home equity lines of credit, night depository, safe deposit box, money order, bank check, automated teller machine, Internet banking, travel card, E bond transaction, brokerage, and other services. The company also provides personal and corporate trust services in the areas of estate settlement, trust administration, employee benefit plans, and retirement services; property and casualty insurance products and services; and various insurance products through licensed representatives, as well as invests in municipal securities. The company was founded in 1887 and is headquartered in Canfield, Ohio.