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Fundamental analysis: Cathay General Bancorp (CATY)

Awarener score: 6.2

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Good) and growth (Modest), and the company's inclination to return cash to the stockholders (Excellent).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.0

  • Business growth has been almost stagnant. It's been below average when measured against peer companies.
  • Cathay General Bancorp business trend stability is good. The higher the stability, the lower the risk. It looks somewhat better than rivals.

Margins score: 7.8

  • CATY profit margins -on goods and services sold- are usually extremely poor. They stand bottom tier against rival companies.
  • Business profit on sales tends to be hardly sufficient. It's substantially worse when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually huge. They remain impressive in relation to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be huge in relation to total revenues. They're still top-notch against similar companies.
  • Profits -before income taxes- are usually huge considering total sales, and remain top tier when measured against rivals.
  • Total net profit tends to be huge when confronted to sales. Company stands top tier when measured against comparable firms.

Growth score: 3.6

  • Cathay General Bancorp has an unknown gross margin growth, as there is not enough data to analyze. It's been impossible to compare to competitors.
  • There is not sufficient data to estimate the operating income margin trend, which has been therefore unknown against comparable firms.
  • Profits growth -available to repay debt and purchase properties- have been almost stagnant, which compares below average when measured against peer enterprises.
  • Growth on earnings -before income taxes and interests on loans taken- have been almost stagnant. It turns to be in a weak position compared to similar stocks.
  • In past years, profits -before income taxes- grew at a very low speed. It was mediocre against rivals.
  • In the previous years, growth on total net profit has been very low, and below average when measured against peer companies.
  • Earnings per share have grown at a very low rhythm in past years. It's been close to average when compared to industry peers.

Miscellaneous score: 5.0

  • CATY had to pay some income taxes in relation to profits made in the past years. It's been slightly better than peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 7.2

  • Cathay General Bancorp usually gets sufficient returns on the resources it controls. It proves top tier when measured against peer firms.
  • The company normally gets excellent proceeds -on the resources directly invested in the business-. They remain excellent in relation to similar companies.
  • There's usually abundant profitability -in relation to owned resources-. It ranks more than average in relation to competitors.
  • In the past, got sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's top tier when measured against comparable enterprises.

Usage of Funds score: 3.9

  • CATY on average doesn't generate genuine funds, so to buy or replace property, plants and equipment must either burn existing cash or increase debt. It stands top tier when measured against rival firms.
  • The company is usually replacing part of the property, plant, and equipment that gets old, keeping some funds for something else. It can't keep forever, which is weak when measured against industry peers.
  • In the past twelve months it paid good dividends, considering the current stock price. It came well ranked against competitors.
  • Has somewhat increased dividend payments in the past years. Business prospects may have improved. The company has behaved close to average when compared to similar firms.
  • The company generates very few genuine funds. Dividend payments are usually on borrowed money, which isn't sustainable in the long run. Unless business prospects improve greatly, future payments could be at risk. Sustainability looks bottom tier against comparable companies.
  • The company usually reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains excellent in relation to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands in a weak position compared to rivals.
  • The company generates very few genuine funds. Investor rewards must be paid burning existing cash or by borrowing money, which isn't sustainable in the long run. Unless business prospects improve greatly, stockholder compensation could be at risk. It still looks last-in-rank when measured against competitors.

Balance Sheet score: 6.8

  • Cathay General Bancorp intangible assets (like brands and goodwill) represent a small portion of resources controlled, according to accounting books. It isn't that a significant risk of liquidating them if the company ever gets in financial distress. It happens to be below average when measured against peer companies.
  • Current ratio remains a mystery, as there was not sufficient Balance Sheet information. It turns to be unidentifiable against similar firms.
  • Almost no resources controlled were provided for with financial debt. Financial strength is great. Company could significantly increase debt if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains better than most rival firms.
  • Controlled resources might be only very slowly turned into cash and equivalents, which is riskier. It looks substantially worse when measured against rivals.
  • Quick ratio is unavailable at this moment, due to lacking data. It's a pity we cannot compare it with peer firms.
  • A conclusion on cash ratio could not be reached, as we lack inputs, which is unfortunate when trying to measure against similar enterprises.
  • Usually, sales are on a month credit. It still ranks almost average when measured against peers.
  • Days of inventory outstanding are not known. It comes up as a big question mark against competitors.
  • We could not gauge the normal operating cycle of the company. It happens to be a mystery against peers.
  • Unfortunately, we had not enough data to estimate the days of payables outstanding. It ranks unknown against industry peers.
  • Cash conversion cycle remains unknown, due to not having enough inputs. It's incomparable against similar companies.
  • Company earns net interest income on its investments and therefore is in a quite comfortable financial position. It stands top-notch against rival firms.
  • Business earnings have usually been great when measured against loans taken. Debt might be repaid almost as soon as desired. It ranks top tier when measured against comparable enterprises.
  • Revenues are quite good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks in good shape compared to similar firms.
  • Resources exploitation is virtually zero, as the firm hardly reports any sales. It's still somewhat worse than peer companies.

Valuation score: 7.4

  • Cathay General Bancorp looks very cheap in relation to profits and financial position. It happens to be great when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains close to average when compared to peers.
  • In the past twelve months, the company generated extraordinary free funds in relation to the stock price, which stands worse than most similar companies.
  • The company usually consumes plenty more funds than can genuinely generate. Business needs are meet by borrowing money or consuming preexistent cash, which can only keep up until a certain limit. Unless the company is driving outstanding business growth, genuine profitability may be brought into question. It's still substantially worse when measured against industry firms.
  • In the past twelve months, the company has rewarded investors, considering both dividends and share on the pie of earnings. It came up excellent in relation to peer ventures.
  • This company is a cash hoarder. It might be well poised to substantially increase stockholder payments, or to fund new business projects. It looks better than most similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation might be reasonable. It ranks similar to peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a very high relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a very weak position compared to rival firms.
  • The relation between the stock price and accounting book value might be reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains somewhat worse than peer firms.
  • In the past twelve months, the operating business earned great money when compared to the current stock price and financial position. It happens to be great when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown an extreme earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be significantly undervalued. It's still excellent in relation to peer companies.

Total score: 6.0


CATY logos

Company at a glance: Cathay General Bancorp (CATY)

Sector, industry: Financial Services, Banks—Regional

Market Cap: 3.45 billions

Revenues TTM: 0.77 billions

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, traveler's check, safe deposit, night deposit, social security payment deposit, collection, bank-by-mail, drive-up and walk-up window, automatic teller machine, Internet banking, investment, and other customary bank services, as well as securities and insurance products. As of March 1, 2022, it operated 31 branches in Southern California, 16 branches in Northern California, 10 branches in New York, four branches in Washington, two branches in Illinois, and two branches in Texas, as well as one branch each in Maryland, Massachusetts, Nevada, and New Jersey, and Hong Kong; and a representative office each in Beijing, Taipei, and Shanghai. The company was founded in 1962 and is headquartered in Los Angeles, California.

Awarener score: 6.2

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Good) and growth (Modest), and the company's inclination to return cash to the stockholders (Excellent).