CVB Financial (NASDAQ:CVBF) & Westamerica Bancorporation (NASDAQ:WABC) Critical Contrast

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

Analyst Ratings

This is a summary of current recommendations and price targets for Westamerica Bancorporation and CVB Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westamerica Bancorporation	0	2	1	0	2.33
CVB Financial	0	2	2	0	2.50

Westamerica Bancorporation presently has a consensus price target of $52.50, suggesting a potential upside of 1.29%. CVB Financial has a consensus price target of $24.17, suggesting a potential upside of 22.92%. Given CVB Financial’s stronger consensus rating and higher probable upside, analysts clearly believe CVB Financial is more favorable than Westamerica Bancorporation.

Profitability

This table compares Westamerica Bancorporation and CVB Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westamerica Bancorporation	42.75%	12.52%	1.96%
CVB Financial	32.28%	9.25%	1.35%

Dividends

Westamerica Bancorporation pays an annual dividend of $1.84 per share and has a dividend yield of 3.6%. CVB Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.1%. Westamerica Bancorporation pays out 40.7% 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. Westamerica Bancorporation has raised its dividend for 34 consecutive years.

Volatility & Risk

Westamerica Bancorporation has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, CVB Financial has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Earnings and Valuation

This table compares Westamerica Bancorporation and CVB Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westamerica Bancorporation	$271.77 million	4.61	$116.17 million	$4.52	11.47
CVB Financial	$648.47 million	4.12	$209.30 million	$1.50	13.11

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

Insider & Institutional Ownership

81.9% of Westamerica Bancorporation shares are held by institutional investors. Comparatively, 74.2% of CVB Financial shares are held by institutional investors. 5.9% of Westamerica Bancorporation 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 hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

CVB Financial beats Westamerica Bancorporation on 9 of the 17 factors compared between the two stocks.

About Westamerica Bancorporation

Westamerica Bancorporation operates as a bank holding company for the Westamerica Bank that provides various banking products and services to individual and commercial customers. The company accepts various deposit products, including retail savings and checking accounts, as well as certificates of deposit. Its loan portfolio includes commercial, commercial and residential real estate, real estate construction, and consumer installment loans, as well as indirect automobile loans. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. The company was founded in 1884 and is headquartered in San Rafael, 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.