Contrasting CVB Financial (NASDAQ:CVBF) & Bay Commercial Bank (NASDAQ:BCML)

Bay Commercial Bank (NASDAQ:BCML) and CVB Financial (NASDAQ:CVBF) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, risk, profitability, institutional ownership, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Bay Commercial Bank and CVB Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bay Commercial Bank	0	1	2	0	2.67
CVB Financial	0	2	2	0	2.50

Bay Commercial Bank presently has a consensus target price of $34.00, suggesting a potential upside of 14.36%. CVB Financial has a consensus target price of $24.17, suggesting a potential upside of 22.92%. Given CVB Financial’s higher probable upside, analysts clearly believe CVB Financial is more favorable than Bay Commercial Bank.

Volatility & Risk

Bay Commercial Bank has a beta of 0.29, meaning that its share price is 71% less volatile than the S&P 500. Comparatively, CVB Financial has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500.

Institutional and Insider Ownership

66.2% of Bay Commercial Bank shares are held by institutional investors. Comparatively, 74.2% of CVB Financial shares are held by institutional investors. 6.5% of Bay Commercial Bank shares are held by company insiders. Comparatively, 6.1% of CVB Financial shares are held 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.

Dividends

Bay Commercial Bank pays an annual dividend of $1.20 per share and has a dividend yield of 4.0%. CVB Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.1%. Bay Commercial Bank pays out 55.0% of its earnings in the form of a dividend. CVB Financial pays out 53.3% 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. Bay Commercial Bank has increased its dividend for 3 consecutive years. CVB Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Bay Commercial Bank and CVB Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bay Commercial Bank	16.92%	7.18%	0.92%
CVB Financial	32.28%	9.25%	1.35%

Valuation & Earnings

This table compares Bay Commercial Bank and CVB Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bay Commercial Bank	$141.48 million	2.29	$23.93 million	$2.18	13.64
CVB Financial	$648.47 million	4.12	$209.30 million	$1.50	13.11

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

Summary

CVB Financial beats Bay Commercial Bank on 11 of the 16 factors compared between the two stocks.

About Bay Commercial Bank

BayCom Corp operates as the bank holding company for United Business Bank that provides various financial services to small and mid-sized businesses, service professionals, and individuals. The company provides demand, savings, money market, and time deposit accounts. It offers commercial and multifamily real estate loans, including owner-occupied and investor real estate loans; commercial and industrial loans, such as equipment loans and working capital lines of credit; small business administration loans; construction and land loans; agriculture-related loans; and consumer loans comprising installment loans, unsecured and secured personal lines of credit, and overdraft protection. In addition, the company provides online and mobile banking, automated teller machine, remote deposit capture, night depository, courier, direct deposit, treasury management, wire transfer, automated clearing house, debit cards, cashier's and travelers checks, letters of credit, lockbox, positive pay, reverse positive pay, and account reconciliation services, as well as zero balance accounts and sweep accounts, including loan sweep. It operates through a network of full-service banking branches in Northern and Southern California; Las Vegas, Nevada; Denver, Colorado; Custer, Delta, and Grand counties, Colorado; and Seattle, Washington and Central New Mexico. The company was formerly known as Bay Commercial Bank and changed its name to BayCom Corp in January 2017. BayCom Corp was incorporated in 2004 and is headquartered in Walnut Creek, California.

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.