Fact based stock research
Cathay General Bancorp (NasdaqGS:CATY)

US1491501045

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Cathay General Bancorp stock research in summary

cathaybank.com

ANALYSIS: With an Obermatt Combined Rank of 48 (worse than 52% compared with investment alternatives), Cathay General Bancorp (Regional Banks, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Cathay General Bancorp are low in value (priced high) with a consolidated Value Rank of 39 (worse than 61% of alternatives). But they show above-average growth (Growth Rank of 55) and are safely financed (Safety Rank of 66, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 48, is a hold recommendation based on Cathay General Bancorp's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Cathay General Bancorp exhibits low value (Obermatt Value Rank of 39), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 55). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 66) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	39
Growth Rank	55
Safety Rank	66
Combined Rank	48

Country	USA
Industry	Regional Banks
Index	NASDAQ, S&P MIDCAP
Size class	XX-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Cathay General Bancorp

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	35	37	32	39
GROWTH
GROWTH	64	52	78	55
SAFETY
SAFETY	59	67	85	66
SENTIMENT
SENTIMENT	n/a	39	74	^new
360° VIEW
360° VIEW	n/a	57	88	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Cathay General Bancorp is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	35	37	32	39
GROWTH
GROWTH	64	52	78	55
SAFETY
SAFETY	59	67	85	66
COMBINED
COMBINED	54	53	82	48

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Cathay General Bancorp the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 39 (worse than 61% compared with alternatives), Cathay General Bancorp shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Cathay General Bancorp. Price-to-Profit (also referred to as price-earnings, P/E) is 61 which means that the stock price compared with what market professionals expect for future profits is lower than for 61% of comparable companies, indicating a good value concerning Cathay General Bancorp's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 30, which means that the stock price is lower as regards to invested capital than for 30% of comparable investments. On the other hand, Price-to-Sales is less favorable than 79% of alternatives (only 21% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 47% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 39, is a hold recommendation based on Cathay General Bancorp's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	19	21	19	21
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	51	62	70	61
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	35	24	36	30
DIVIDEND YIELD
DIVIDEND YIELD	67	61	34	53
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	35	37	32	39

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Cathay General Bancorp; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), Cathay General Bancorp shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Cathay General Bancorp. Capital Growth has a rank of 67, which means that currently professionals expect the company to grow its invested capital more than 35% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 55 (above 55% of alternative investments). But Sales Growth has only a rank of 40, which means that, currently, professionals expect the company to grow less than 60% of its competitors, and Profit Growth is also low at a rank of 35. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Cathay General Bancorp, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	55	63	48	40
PROFIT GROWTH
PROFIT GROWTH	84	37	67	35
CAPITAL GROWTH
CAPITAL GROWTH	n/a	47	63	67
STOCK RETURNS
STOCK RETURNS	73	51	83	55
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	64	52	78	55

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Cathay General Bancorp.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 66 (better than 66% compared with alternatives), the company Cathay General Bancorp has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Cathay General Bancorp is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Cathay General Bancorp. Leverage is at a rank of 78, meaning the company has a below-average debt-to-equity ratio. It has less debt than 78% of its competitors. Liquidity is also good at a rank of 64, meaning the company generates more profit to service its debt than 64% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 40, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 60% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 66 (better than 66% compared with alternatives), Cathay General Bancorp has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Cathay General Bancorp. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Cathay General Bancorp and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	63	82	88	78
REFINANCING
REFINANCING	12	60	49	40
LIQUIDITY
LIQUIDITY	79	37	66	64
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	59	67	85	66

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Cathay General Bancorp and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	22	36	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	75	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	18	88	^new
MARKET PULSE
MARKET PULSE	n/a	88	27	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	39	74	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Cathay General Bancorp.
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