Contrasting First Internet Bancorp (NASDAQ:INBK) and East West Bancorp (NASDAQ:EWBC)

East West Bancorp (NASDAQ:EWBC) and First Internet Bancorp (NASDAQ:INBK) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Insider and Institutional Ownership

89.5% of East West Bancorp shares are held by institutional investors. Comparatively, 65.5% of First Internet Bancorp shares are held by institutional investors. 1.0% of East West Bancorp shares are held by company insiders. Comparatively, 7.1% of First Internet Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares East West Bancorp and First Internet Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
East West Bancorp	25.73%	15.71%	1.58%
First Internet Bancorp	7.45%	5.86%	0.40%

Dividends

East West Bancorp pays an annual dividend of $2.40 per share and has a dividend yield of 3.3%. First Internet Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.0%. East West Bancorp pays out 28.8% of its earnings in the form of a dividend. First Internet Bancorp pays out 8.3% 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.

Earnings & Valuation

This table compares East West Bancorp and First Internet Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
East West Bancorp	$2.57 billion	3.93	$1.17 billion	$8.33	8.75
First Internet Bancorp	$128.91 million	1.54	$25.28 million	$2.89	7.91

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for East West Bancorp and First Internet Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
East West Bancorp	0	3	10	0	2.77
First Internet Bancorp	0	2	2	0	2.50

East West Bancorp currently has a consensus price target of $111.31, indicating a potential upside of 52.75%. First Internet Bancorp has a consensus price target of $40.50, indicating a potential upside of 77.17%. Given First Internet Bancorp’s higher probable upside, analysts plainly believe First Internet Bancorp is more favorable than East West Bancorp.

Risk and Volatility

East West Bancorp has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500. Comparatively, First Internet Bancorp has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.

Summary

East West Bancorp beats First Internet Bancorp on 13 of the 16 factors compared between the two stocks.

About East West Bancorp

East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals in the United States. The company operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. It accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. The company’s loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction finance, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, loan syndication, and equipment financing, as well as financing services for clients to facilitate their business transactions between the United States and Asia. It also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. The company was founded in 1973 and is headquartered in Pasadena, California.

About First Internet Bancorp

First Internet Bancorp operates as the bank holding company for First Internet Bank of Indiana that provides commercial, small business, consumer, and municipal banking products and services to individuals and commercial customers in the United States. The company accepts non-interest bearing and interest-bearing demand deposit, commercial deposit, savings, money market, and Banking-as-a-Service brokered deposit accounts, as well as certificates of deposit. It also offers commercial and industrial, owner-occupied and investor commercial real estate, construction, residential mortgage, home equity, line of credit and home improvement, small installment, term, and other consumer loans, as well as single tenant lease financing, and public and healthcare finance; franchise finance; and small business lending. In addition, the company is involved in the purchase, manage, service, and safekeeping of municipal securities; and provision of public and municipal lending and leasing products to government entities. Further, the company offers corporate credit card and treasury management services. First Internet Bancorp was founded in 1998 and is headquartered in Fishers, Indiana.