Comparing First Capital (NASDAQ:FCAP) and Community West Bancshares (NASDAQ:CWBC)

Community West Bancshares (NASDAQ:CWBC) and First Capital (NASDAQ:FCAP) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Community West Bancshares and First Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community West Bancshares	0	2	3	1	2.83
First Capital	0	0	2	0	3.00

Community West Bancshares presently has a consensus price target of $28.17, suggesting a potential upside of 7.14%. Given Community West Bancshares’ higher possible upside, research analysts clearly believe Community West Bancshares is more favorable than First Capital.

Insider and Institutional Ownership

33.8% of Community West Bancshares shares are owned by institutional investors. Comparatively, 11.7% of First Capital shares are owned by institutional investors. 9.0% of Community West Bancshares shares are owned by company insiders. Comparatively, 4.1% of First Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Community West Bancshares has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, First Capital has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.

Earnings & Valuation

This table compares Community West Bancshares and First Capital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community West Bancshares	$196.20 million	3.64	$38.17 million	$1.85	14.21
First Capital	$65.31 million	3.27	$16.37 million	$5.53	11.56

Community West Bancshares has higher revenue and earnings than First Capital. First Capital is trading at a lower price-to-earnings ratio than Community West Bancshares, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Community West Bancshares and First Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Community West Bancshares	16.86%	10.12%	1.16%
First Capital	26.79%	13.39%	1.45%

Dividends

Community West Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 1.8%. First Capital pays an annual dividend of $1.28 per share and has a dividend yield of 2.0%. Community West Bancshares pays out 25.9% of its earnings in the form of a dividend. First Capital pays out 23.1% 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. First Capital has raised its dividend for 2 consecutive years. First Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

About Community West Bancshares

Community West Bancshares operates as the bank holding company for Community West Bank, N.A. that provides various financial products and services in California. The company offers deposit products, such as checking accounts, savings accounts, money market accounts, and fixed rate and fixed maturity certificates of deposits; and cash management products. It also provides commercial, commercial real estate, consumer, manufactured housing, and small business administration loans, as well as agricultural loans for real estate and operating lines; home equity lines of credit collateralized by residential real estate; single family real estate loans; and installment loans consisting of automobile and general-purpose loans. The company serves small to medium-sized businesses and their owners, professionals, high-net worth individuals, and non-profit organizations. Community West Bancshares was founded in 1989 and is headquartered in Goleta, California.

About First Capital

First Capital, Inc. operates as the bank holding company for First Harrison Bank that provides various banking services to individuals and business customers. The company offers various deposit instruments, including non-interest-bearing checking accounts, negotiable order of withdrawal accounts, money market accounts, regular savings accounts, certificates of deposit, and retirement savings plans. It also provides residential mortgage loans, construction loans for residential and commercial properties, and commercial real estate loans, as well as commercial business loans. In addition, the company originates mortgage loans for sale in the secondary market and sells non-deposit investment products; and offers various secured or guaranteed consumer loans comprising automobile and truck loans, home equity loans, home improvement loans, boat loans, mobile home loans, credit cards and other personal loans, and loans secured by savings deposits, as well as unsecured consumer loans. First Capital, Inc. was founded in 1891 and is based in Corydon, Indiana.