Scott W. Hood, CFA, is CEO and portfolio manager at First Wilshire Securities Management, Pasadena, California, which manages $410 million. FirstWilshire.com
This week’s Stock of the Week serves specific communities and understands them very well.
East West Bancorp Inc. (EWBC) operates East West Bank, which specializes in business lending and financial services for individuals and corporations that operate both in the US and China.
It is especially prominent in Chinese-American, Taiwanese-American and Vietnamese-American communities. Its 130 US locations are concentrated in parts of California, New York, Georgia, Massachusetts, Texas and other states where those communities have a strong presence. It also has full-service branches in Hong Kong, Shanghai and two other cities in China, plus representative offices in Beijing, Taipei and elsewhere.
East West knows the communities it serves very well. In addition to making many large commercial and industrial loans, for years it has made low-document loans to immigrants—loans that require little to no documentation of income. It has had a very low default rate on such loans. Its strong connections to China have been a negative for investor perception as US-China trade disputes linger, but revenue continues growing steadily. It was $1.44 billion in 2017, $1.6 billion for 2018 and could be $1.71 billion this year. And the dividend of $0.92/share/yr., recently yielding 1.75%, appears secure.
Fiscal year: December. Earnings per share: 2019 est./$5.09…2018/$4.81…2017/$3.47.
Scott W. Hood, CFA, is CEO and portfolio manager, First Wilshire Securities Management, Pasadena, California, which manages $315 million. FirstWilshire.com