California First National Bancorp (OTCMKTS: CFNB) and CVB Financial (NASDAQ:CVBF) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitability.

Volatility and Risk

California First National Bancorp has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, CVB Financial has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for California First National Bancorp and CVB Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
California First National Bancorp 0 0 0 0 N/A
CVB Financial 0 4 0 0 2.00

CVB Financial has a consensus price target of $22.25, suggesting a potential downside of 6.79%. Given CVB Financial’s higher probable upside, analysts plainly believe CVB Financial is more favorable than California First National Bancorp.

Dividends

California First National Bancorp pays an annual dividend of $0.46 per share and has a dividend yield of 3.1%. CVB Financial pays an annual dividend of $0.56 per share and has a dividend yield of 2.3%. California First National Bancorp pays out 41.4% of its earnings in the form of a dividend. CVB Financial pays out 53.8% 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. California First National Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares California First National Bancorp and CVB Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
California First National Bancorp $36.69 million 4.21 $11.12 million $1.11 13.53
CVB Financial $300.60 million 8.75 $101.42 million $1.04 22.95

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

Profitability

This table compares California First National Bancorp and CVB Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
California First National Bancorp 32.09% 5.92% 1.41%
CVB Financial 35.60% 10.89% 1.36%

Institutional & Insider Ownership

12.5% of California First National Bancorp shares are owned by institutional investors. Comparatively, 69.4% of CVB Financial shares are owned by institutional investors. 78.5% of California First National Bancorp shares are owned by insiders. Comparatively, 7.0% of CVB Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

CVB Financial beats California First National Bancorp on 9 of the 14 factors compared between the two stocks.

About California First National Bancorp

California First National Bancorp is a bank holding company of California First National Bank (CalFirst Bank or the Bank) and leasing subsidiary, California First Leasing Corp (CalFirst Leasing). The primary business of the Company is secured financing provided through leasing and financing capital assets, commercial loans acquired through participation in the syndicated commercial loan market, by providing non-recourse loans to third parties secured by leases and equipment, and direct commercial loans. Its segments include CalFirst Bank and CalFirst Leasing. CalFirst Bank gathers deposits through posting rates on the Internet and conducts all banking and other operations from one central location. It provides leasing and financing to customers throughout the United States and across a range of industries and disciplines, including commercial, industrial and financial companies, as well as educational, government and non-profit entities.

About CVB Financial

CVB Financial Corp. (CVB) is the bank holding company for Citizens Business Bank (the Bank). The Bank operates through two segments: Business Financial and Commercial Banking Centers (Centers), and Other Operations. The Company’s administrative and other smaller operating departments are combined into the Other segment. As of December 31, 2016, there were 42 Business Financial Centers and eight Commercial Banking Centers located in the Inland Empire, Los Angeles County, Orange County, San Diego County, Ventura County, Santa Barbara County, and the Central Valley area of California. Its trust offices are located in Ontario, Newport Beach and Pasadena. These offices serve as sales offices for the Bank’s wealth management, trust and investment products. It also offers specialized services designed for commercial customers. These services include cash management systems for monitoring cash flow, a credit card program for merchants, courier pick-up and delivery, and payroll services.

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