Reviewing Opus Bank (OPB) and Lloyds Banking Group (LYG)

Opus Bank (NASDAQ: OPB) and Lloyds Banking Group (NYSE:LYG) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Opus Bank and Lloyds Banking Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Opus Bank 0 3 1 0 2.25
Lloyds Banking Group 3 3 4 0 2.10

Opus Bank presently has a consensus price target of $30.75, suggesting a potential upside of 6.59%. Given Opus Bank’s stronger consensus rating and higher probable upside, research analysts plainly believe Opus Bank is more favorable than Lloyds Banking Group.

Profitability

This table compares Opus Bank and Lloyds Banking Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Opus Bank 17.37% 6.36% 0.85%
Lloyds Banking Group 12.81% 19.07% 1.15%

Insider and Institutional Ownership

97.8% of Opus Bank shares are held by institutional investors. Comparatively, 2.4% of Lloyds Banking Group shares are held by institutional investors. 0.0% of Lloyds Banking Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Opus Bank and Lloyds Banking Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Opus Bank $308.32 million 3.21 $46.89 million $1.49 19.36
Lloyds Banking Group $50.67 billion 1.26 $4.91 billion $0.55 6.45

Lloyds Banking Group has higher revenue and earnings than Opus Bank. Lloyds Banking Group is trading at a lower price-to-earnings ratio than Opus Bank, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Opus Bank has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Lloyds Banking Group has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Dividends

Opus Bank pays an annual dividend of $0.44 per share and has a dividend yield of 1.5%. Lloyds Banking Group pays an annual dividend of $0.23 per share and has a dividend yield of 6.5%. Opus Bank pays out 29.5% of its earnings in the form of a dividend. Lloyds Banking Group pays out 41.8% 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. Lloyds Banking Group has increased its dividend for 2 consecutive years. Lloyds Banking Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Opus Bank beats Lloyds Banking Group on 9 of the 17 factors compared between the two stocks.

About Opus Bank

Opus Bank provides various banking products, services, and solutions for small to mid-sized companies, entrepreneurs, real estate investors, professionals, and high net worth individuals. It offers demand deposits, checking accounts, money market accounts, savings accounts, and certificates of deposit. The company also provides multifamily residential loans, commercial real estate loans, commercial business loans, small business administration loans, construction loans, and single-family residential and consumer loans; and loans and lines for working capital, expansion, acquisitions, consolidation, and transition. In addition, it offers financial and advisory services related to raising equity capital, targeted acquisition and divestiture strategies, general mergers and acquisitions, debt and equity financing, balance sheet restructuring, valuation, strategy, and performance improvement. Further, the company provides commercial escrow services and facilitates tax-deferred commercial exchanges; financial and advisory services; and treasury, cash management, and depository solutions. As of March 5, 2018, it operated 50 banking offices, including 31 in California, 16 in the Seattle/Puget Sound region in Washington, 2 in the Phoenix metropolitan area of Arizona, and 1 in Portland, Oregon. The company was formerly known as Bay Cities National Bank. Opus Bank was founded in 1982 and is headquartered in Irvine, California.

About Lloyds Banking Group

Lloyds Banking Group plc provides banking and financial services under the Lloyds Bank, Halifax, Bank of Scotland, and Scottish Widows brands in the United Kingdom and internationally. The company operates through three segments: Retail, Commercial Banking, and Insurance and Wealth. The Retail segment offers a range of financial service products, including current accounts, savings accounts, mortgages, motor finance, and unsecured consumer lending products to personal and small business customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, term lending, and debt capital markets services for small and medium sized enterprises, corporates, mid-markets, and financial institutions. The Insurance and Wealth segment offers insurance products, such as life, home, motor, and protection insurance; investments comprising pensions and investment products; and wealth management products and services. It also provides credit cards, and personal and business loans. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.

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