Critical Contrast: Columbia Banking System (NASDAQ:COLB) & CVB Financial (NASDAQ:CVBF)

CVB Financial (NASDAQ:CVBF) and Columbia Banking System (NASDAQ:COLB) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations and price targets for CVB Financial and Columbia Banking System, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CVB Financial	0	2	2	0	2.50
Columbia Banking System	0	11	3	1	2.33

CVB Financial presently has a consensus target price of $24.17, suggesting a potential upside of 13.89%. Columbia Banking System has a consensus target price of $31.88, suggesting a potential downside of 1.65%. Given CVB Financial’s stronger consensus rating and higher probable upside, research analysts plainly believe CVB Financial is more favorable than Columbia Banking System.

Valuation & Earnings

This table compares CVB Financial and Columbia Banking System”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CVB Financial	$648.47 million	4.48	$209.30 million	$1.50	14.15
Columbia Banking System	$3.21 billion	3.02	$550.00 million	$2.26	14.35

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

Dividends

CVB Financial pays an annual dividend of $0.80 per share and has a dividend yield of 3.8%. Columbia Banking System pays an annual dividend of $1.48 per share and has a dividend yield of 4.6%. CVB Financial pays out 53.3% of its earnings in the form of a dividend. Columbia Banking System pays out 65.5% 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. Columbia Banking System has increased its dividend for 4 consecutive years. Columbia Banking System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

74.2% of CVB Financial shares are owned by institutional investors. Comparatively, 92.5% of Columbia Banking System shares are owned by institutional investors. 6.1% of CVB Financial shares are owned by company insiders. Comparatively, 0.7% of Columbia Banking System shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

CVB Financial has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Columbia Banking System has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500.

Profitability

This table compares CVB Financial and Columbia Banking System’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CVB Financial	32.28%	9.30%	1.36%
Columbia Banking System	17.11%	11.40%	1.26%

Summary

Columbia Banking System beats CVB Financial on 10 of the 18 factors compared between the two stocks.

About CVB Financial

CVB Financial Corp. operates as a bank holding company for Citizens Business Bank, a state-chartered bank that provides banking and financial services to small to mid-sized businesses and individuals. It offers checking, savings, money market, and time certificates of deposit products for business and personal accounts; and serves as a federal tax depository for business customers. The company also provides commercial lending products comprising lines of credit and other working capital financing, accounts receivable lending, and letters of credit; agriculture loans to finance the operating needs of wholesale dairy farm operations, cattle feeders, livestock raisers, and farmers; lease financing services for municipal governments; commercial real estate and construction loans; and consumer financing products, including automobile leasing and financing, lines of credit, credit cards, home mortgages, and home equity loans and lines of credit. In addition, it offers various specialized services, such as treasury management systems for monitoring cash flow, merchant card processing program, armored pick-up and delivery, payroll services, remote deposit capture, electronic funds transfers, wires and automated clearinghouse, and online account access. Further, the company provides trust services, such as fiduciary services, mutual funds, annuities, 401(k) plans, and individual investment accounts. CVB Financial Corp. was founded in 1974 and is headquartered in Ontario, California.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.