Head-To-Head Review: Preferred Bank (PFBC) and The Competition

Preferred Bank (NASDAQ:PFBC) is one of 919 publicly-traded companies in the “Banks” industry, but how does it weigh in compared to its rivals? We will compare Preferred Bank to related companies based on the strength of its earnings, dividends, analyst recommendations, valuation, institutional ownership, risk and profitability.

Insider & Institutional Ownership

72.8% of Preferred Bank shares are held by institutional investors. Comparatively, 47.8% of shares of all “Banks” companies are held by institutional investors. 9.7% of shares of all “Banks” companies 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.

Analyst Ratings

This is a summary of current ratings and target prices for Preferred Bank and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Preferred Bank	0	3	2	2	2.86
Preferred Bank Competitors	7492	30246	27845	1488	2.35

Preferred Bank presently has a consensus price target of $113.33, indicating a potential upside of 9.74%. As a group, “Banks” companies have a potential upside of 14.34%. Given Preferred Bank’s rivals higher probable upside, analysts plainly believe Preferred Bank has less favorable growth aspects than its rivals.

Risk & Volatility

Preferred Bank has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, Preferred Bank’s rivals have a beta of 0.61, suggesting that their average share price is 39% less volatile than the S&P 500.

Earnings and Valuation

This table compares Preferred Bank and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Preferred Bank	$285.93 million	$133.63 million	9.54
Preferred Bank Competitors	$37.93 billion	$2.42 billion	21.40

Preferred Bank’s rivals have higher revenue and earnings than Preferred Bank. Preferred Bank is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Preferred Bank and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Preferred Bank	26.20%	16.84%	1.72%
Preferred Bank Competitors	15.64%	9.43%	0.93%

Dividends

Preferred Bank pays an annual dividend of $3.20 per share and has a dividend yield of 3.1%. Preferred Bank pays out 29.5% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 8.9% and pay out 28.9% of their earnings in the form of a dividend. Preferred Bank has increased its dividend for 5 consecutive years. Preferred Bank lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Preferred Bank rivals beat Preferred Bank on 9 of the 15 factors compared.

About Preferred Bank

Preferred Bank is a California-based commercial bank headquartered in Los Angeles. Founded in 1991, it serves businesses, professionals, real estate investors and individuals through offices in Southern California and the San Francisco Bay Area. The bank offers commercial and small-business lending, including financing for commercial real estate, as well as deposit accounts and treasury management services. Its other services include online banking and cash-management tools for business customers.