CoBiz Financial (NASDAQ: COBZ) and Cardinal Financial (NASDAQ:CFNL) are both small-cap banks – nec companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, earnings, risk, valuation and dividends.

Risk & Volatility

CoBiz Financial has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500. Comparatively, Cardinal Financial has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Institutional and Insider Ownership

82.9% of CoBiz Financial shares are held by institutional investors. Comparatively, 75.2% of Cardinal Financial shares are held by institutional investors. 9.9% of CoBiz Financial shares are held by company insiders. Comparatively, 6.2% of Cardinal Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares CoBiz Financial and Cardinal Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CoBiz Financial $161.94 million 5.58 $34.89 million $0.90 23.79
Cardinal Financial N/A N/A N/A $1.47 19.76

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

Dividends

CoBiz Financial pays an annual dividend of $0.22 per share and has a dividend yield of 1.0%. Cardinal Financial pays an annual dividend of $0.52 per share and has a dividend yield of 1.8%. CoBiz Financial pays out 24.4% of its earnings in the form of a dividend. Cardinal Financial pays out 35.4% 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.

Analyst Ratings

This is a summary of current recommendations and price targets for CoBiz Financial and Cardinal Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CoBiz Financial 0 2 2 0 2.50
Cardinal Financial 0 1 0 0 2.00

CoBiz Financial presently has a consensus target price of $20.50, suggesting a potential downside of 4.25%. Cardinal Financial has a consensus target price of $31.00, suggesting a potential upside of 6.75%. Given Cardinal Financial’s higher probable upside, analysts plainly believe Cardinal Financial is more favorable than CoBiz Financial.

Profitability

This table compares CoBiz Financial and Cardinal Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CoBiz Financial 21.95% 12.06% 1.01%
Cardinal Financial 27.09% 10.86% 1.17%

Summary

CoBiz Financial beats Cardinal Financial on 9 of the 14 factors compared between the two stocks.

About CoBiz Financial

CoBiz Financial Inc. is a financial holding company. The Company provides a range of banking and related services through its subsidiaries, CoBiz Bank (Bank), CoBiz Insurance, Inc. and CoBiz IM, Inc. (CoBiz IM). The Company’s segments include Commercial Banking, Fee-Based Lines, and Corporate Support and Other. Its Commercial Banking segment consists of the operations of the Bank, a full-service business banking institution that offers commercial, real estate and private banking, as well as treasury management, interest-rate hedging and depository products. Its Fee-Based Lines segment consists of the operations of CoBiz Wealth, LLC and CoBiz Insurance, Inc. CoBiz Wealth, LLC provides investment management advisory services to individuals, families and businesses. CoBiz Insurance, Inc. offers property and casualty (P&C) and employee benefit group insurance (EB) broker agency to small to mid-sized employers, commercial enterprises and individual lines to their owners.

About Cardinal Financial

Cardinal Financial Corporation is a financial holding company. The Company owns Cardinal Bank (the Bank), a Virginia state-chartered community bank. The Bank operates in three business segments: commercial banking, mortgage banking and wealth management services. The commercial banking segment includes both commercial and consumer lending and provides customers such products as commercial loans, real estate loans, and other business financing and consumer loans. In addition, the commercial banking segment provides customers with several choices of deposit products, including demand deposit accounts, savings accounts and certificates of deposit. The mortgage banking segment is engaged in the origination and acquisition of residential mortgages for sale into the secondary market. The wealth management services segment provides investment and financial advisory services to businesses and individuals, including financial planning, retirement/estate planning and investment management.

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