Contrasting First US Bancshares (NASDAQ:FUSB) & Cathay General Bancorp (NASDAQ:CATY)

First US Bancshares (NASDAQ:FUSB) and Cathay General Bancorp (NASDAQ:CATY) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, institutional ownership, analyst recommendations, earnings and profitability.

Earnings & Valuation

This table compares First US Bancshares and Cathay General Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First US Bancshares	$39.73 million	1.94	$8.17 million	$1.33	10.15
Cathay General Bancorp	$729.72 million	4.18	$285.98 million	$3.96	10.95

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

Profitability

This table compares First US Bancshares and Cathay General Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First US Bancshares	13.21%	8.61%	0.75%
Cathay General Bancorp	20.57%	10.70%	1.29%

Risk and Volatility

First US Bancshares has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Cathay General Bancorp has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for First US Bancshares and Cathay General Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First US Bancshares	0	0	0	0	0.00
Cathay General Bancorp	1	2	2	0	2.20

Cathay General Bancorp has a consensus target price of $50.80, indicating a potential upside of 17.13%. Given Cathay General Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Cathay General Bancorp is more favorable than First US Bancshares.

Insider and Institutional Ownership

18.7% of First US Bancshares shares are owned by institutional investors. Comparatively, 75.0% of Cathay General Bancorp shares are owned by institutional investors. 11.2% of First US Bancshares shares are owned by insiders. Comparatively, 4.8% of Cathay General Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

First US Bancshares pays an annual dividend of $0.28 per share and has a dividend yield of 2.1%. Cathay General Bancorp pays an annual dividend of $1.36 per share and has a dividend yield of 3.1%. First US Bancshares pays out 21.1% of its earnings in the form of a dividend. Cathay General Bancorp pays out 34.3% 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.

Summary

Cathay General Bancorp beats First US Bancshares on 14 of the 16 factors compared between the two stocks.

About First US Bancshares

First US Bancshares, Inc. operates as the bank holding company for First US Bank that provides commercial banking products and services. The company offers non-interest-bearing demand deposits, savings accounts, NOW accounts, money market demand accounts, individual retirement accounts, and time deposits. Its loan products include commercial construction, land, and land development loans, including residential housing projects, commercial and industrial development, and for purchase and improvement of raw land for agricultural production; mortgage loans on one-to-four family and multi-family residential properties; real estate loans secured by commercial and industrial properties, office or mixed-use facilities, strip shopping centers, and other commercial properties; commercial and industrial loans and leases; and secured and unsecured personal loans, including automobile loans, loans for household and personal purposes, and other direct consumer installment loans. The company also provides loans secured by collateral in form of personal property items. In addition, it provides letters of credit; and safe deposit box and remote deposit capture services. The company serves small-and medium-sized businesses, property managers, business executives, professionals, and other individuals. The company was formerly known as United Security Bancshares, Inc. and changed its name to First US Bancshares, Inc. in October 2016. First US Bancshares, Inc. was founded in 1952 and is headquartered in Birmingham, Alabama.

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.