Northrim BanCorp (NASDAQ:NRIM) & Hope Bancorp (NASDAQ:HOPE) Critical Contrast

Northrim BanCorp (NASDAQ:NRIM) and Hope Bancorp (NASDAQ:HOPE) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Analyst Ratings

This is a summary of recent ratings for Northrim BanCorp and Hope Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northrim BanCorp	0	0	1	0	3.00
Hope Bancorp	0	2	1	0	2.33

Northrim BanCorp currently has a consensus price target of $104.00, indicating a potential upside of 8.46%. Hope Bancorp has a consensus price target of $13.50, indicating a potential upside of 18.53%. Given Hope Bancorp’s higher possible upside, analysts plainly believe Hope Bancorp is more favorable than Northrim BanCorp.

Valuation & Earnings

This table compares Northrim BanCorp and Hope Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northrim BanCorp	$195.96 million	2.70	$36.97 million	$7.52	12.75
Hope Bancorp	$1.00 billion	1.46	$99.63 million	$0.78	14.60

Hope Bancorp has higher revenue and earnings than Northrim BanCorp. Northrim BanCorp is trading at a lower price-to-earnings ratio than Hope Bancorp, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Northrim BanCorp has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Hope Bancorp has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Institutional and Insider Ownership

66.0% of Northrim BanCorp shares are owned by institutional investors. Comparatively, 84.0% of Hope Bancorp shares are owned by institutional investors. 3.9% of Northrim BanCorp shares are owned by insiders. Comparatively, 5.2% of Hope Bancorp shares are owned 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.

Dividends

Northrim BanCorp pays an annual dividend of $2.56 per share and has a dividend yield of 2.7%. Hope Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 4.9%. Northrim BanCorp pays out 34.0% of its earnings in the form of a dividend. Hope Bancorp pays out 71.8% 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. Northrim BanCorp has increased its dividend for 16 consecutive years.

Profitability

This table compares Northrim BanCorp and Hope Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northrim BanCorp	20.23%	15.97%	1.41%
Hope Bancorp	9.82%	4.60%	0.57%

Summary

Northrim BanCorp beats Hope Bancorp on 9 of the 16 factors compared between the two stocks.

About Northrim BanCorp

Northrim BanCorp, Inc. operates as the bank holding company for Northrim Bank that provides commercial banking products and services to businesses and professional individuals. It operates through two segments, Community Banking and Home Mortgage Lending. The company offers noninterest-bearing checking accounts and interest-bearing time deposits, checking and savings accounts, individual retirement and money market deposit accounts, certificates of deposit, and business sweep accounts. It also provides short and medium-term commercial loans, commercial credit lines, construction and real estate loans, and consumer loans, as well as short-term working capital. In addition, the company offers other services comprising consumer and business online banking, mobile app, and mobile deposits; and debit and credit cards. Further, it provides mobile web and app banking, consumer online account opening, personal finance, online documents, consumer debit cards, business debit cards, my rewards for consumer debit cards, retail lockbox, card control, corporate purchase cards, integrated payables, home equity advantage access cards, telebanking, and automated teller services. Additionally, the company offers personalized checks at account opening, overdraft protection from a savings account, commercial drive-up banking, automatic transfer and payment, People Pay, external transfer, Bill Pay, wire transfer, direct payroll deposit, electronic tax payment, Automated Clearing House origination and receipt, remote deposit capture, account reconciliation and positive pay, merchant, cash management, annuity, and long-term investment portfolio products and services. It also provides investment advisory, trust, wealth management, factoring, and mortgage services. The company was founded in 1990 and is headquartered in Anchorage, Alaska.

About Hope Bancorp

Hope Bancorp, Inc. operates as the bank holding company for Bank of Hope that provides retail and commercial banking services for businesses and individuals in the United States. It accepts personal and business checking, money market, savings, time deposit, and individual retirement accounts. The company also offers loans comprising commercial and industrial loans to businesses for various purposes, such as working capital, purchasing inventory, debt refinancing, business acquisitions, international trade finance, other business-related financing, and loans syndication services; commercial real estate loans; residential mortgage loans; small business administration loans; and consumer loans, such as single-family mortgage, home equity, automobile, credit card, and personal loans. In addition, it provides internet banking and bill-pay, remote deposit capture, lock box, and ACH origination services; treasury management services; foreign currency exchange transactions; interest rate contracts and wealth management services; automated teller machine services; and engages in investment activities. Hope Bancorp, Inc. was founded in 1986 and is headquartered in Los Angeles, California.