Avidbank (OTCMKTS:AVBH) versus CPB (NYSE:CPF) Critical Survey

CPB (NYSE:CPF) and Avidbank (OTCMKTS:AVBH) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for CPB and Avidbank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CPB	0	1	2	0	2.67
Avidbank	0	0	2	0	3.00

CPB presently has a consensus target price of $34.50, indicating a potential upside of 16.67%. Avidbank has a consensus target price of $25.50, indicating a potential upside of 0.00%. Given CPB’s higher possible upside, equities analysts plainly believe CPB is more favorable than Avidbank.

Profitability

This table compares CPB and Avidbank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CPB	17.31%	12.80%	0.95%
Avidbank	14.31%	N/A	N/A

Institutional and Insider Ownership

88.4% of CPB shares are owned by institutional investors. Comparatively, 15.9% of Avidbank shares are owned by institutional investors. 2.4% of CPB shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares CPB and Avidbank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CPB	$344.82 million	2.31	$53.41 million	$2.23	13.26
Avidbank	$47.45 million	5.88	$21.01 million	$3.07	8.31

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

Risk and Volatility

CPB has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Avidbank has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.

Summary

CPB beats Avidbank on 10 of the 13 factors compared between the two stocks.

About CPB

Central Pacific Financial Corp. operates as the bank holding company for Central Pacific Bank that provides a range of commercial banking products and services to businesses, professionals, and individuals in the United States. It offers various deposit products and services, including checking, savings and time deposits, cash management and digital banking, trust, and retail brokerage services, as well as money market accounts and certificates of deposit. The company also provides various lending activities, such as commercial, commercial and residential mortgage, home equity, and consumer loans; and other products and services comprising debit cards, internet and mobile banking, cash management services, full-service ATMs, safe deposit boxes, international banking services, night depository facilities, foreign exchange, and wire transfers. In addition, it offers wealth management products and services that include non-deposit investment products, annuities, insurance, investment management, asset custody and general consultation, and planning services. The company was founded in 1954 and is headquartered in Honolulu, Hawaii.

About Avidbank

Avidbank Holdings, Inc. operates as a bank holding company for Avidbank that provides financial products and services to businesses and individuals in the Santa Clara, San Mateo, and San Francisco counties. The company offers business and personal deposit products, such as checking, money market, and savings accounts; and certificates of deposit. It also provides personal lending products, including secured and unsecured lines of credit, home equity lines of credit, remodel and new home construction loans, and term loans; corporate banking comprising working capital lines of credit, equipment loans, acquisition financing, shareholder buyouts, ESOP loans, and owner-occupied real estate loans; and commercial real estate lending, such as permanent loans and bridge financing products. In addition, the company offers construction lending products, including land acquisition loans, pre-development loans, construction spec SFD, owner-occupied SFD, condominiums, subdivision, unsecured business lines, real estate bridge loans, and RLOC real estate secured loans. Further, it provides various financing solutions, such as fund finance, structured finance, venture lending, asset-based lending, and sponsor finance. Additionally, the company offers various services, such as automated clearing house payments and collections, bill pay, positive pay, wire transfer, lockbox, merchant, remote deposit capture, risk and fraud analytics services, ATM/debit cards, credit cards, business courier, cash management, and complimentary notary services. Furthermore, it offers online and mobile banking services. The company was founded in 2003 and is headquartered in San Jose, California.