Analyzing Community West Bancshares (NASDAQ:CWBC) & Mid Penn Bancorp (NASDAQ:MPB)

Community West Bancshares (NASDAQ:CWBC) and Mid Penn Bancorp (NASDAQ:MPB) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Profitability

This table compares Community West Bancshares and Mid Penn Bancorp’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%
Mid Penn Bancorp	17.55%	8.82%	1.13%

Insider and Institutional Ownership

33.8% of Community West Bancshares shares are owned by institutional investors. Comparatively, 43.1% of Mid Penn Bancorp shares are owned by institutional investors. 9.0% of Community West Bancshares shares are owned by company insiders. Comparatively, 7.2% of Mid Penn Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Community West Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 1.8%. Mid Penn Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 2.5%. Community West Bancshares pays out 25.9% of its earnings in the form of a dividend. Mid Penn Bancorp pays out 32.5% 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.

Valuation and Earnings

This table compares Community West Bancshares and Mid Penn Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community West Bancshares	$46.27 million	15.35	$38.17 million	$1.85	14.15
Mid Penn Bancorp	$260.62 million	3.62	$56.25 million	$2.83	13.15

Mid Penn Bancorp has higher revenue and earnings than Community West Bancshares. Mid Penn Bancorp 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.

Risk and Volatility

Community West Bancshares has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Mid Penn Bancorp has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Community West Bancshares and Mid Penn Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community West Bancshares	0	2	3	0	2.60
Mid Penn Bancorp	0	1	3	0	2.75

Community West Bancshares currently has a consensus target price of $28.17, suggesting a potential upside of 7.59%. Mid Penn Bancorp has a consensus target price of $39.50, suggesting a potential upside of 6.15%. Given Community West Bancshares’ higher probable upside, analysts clearly believe Community West Bancshares is more favorable than Mid Penn Bancorp.

Summary

Community West Bancshares beats Mid Penn Bancorp on 8 of the 15 factors compared between the two stocks.

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 Mid Penn Bancorp

Mid Penn Bancorp, Inc. operates as the bank holding company for Mid Penn Bank that provides commercial banking services to individuals, partnerships, non-profit organizations, and corporations. The company offers various time and demand deposit products, including checking accounts, savings accounts, clubs, money market deposit accounts, certificates of deposit, and individual retirement accounts. It also provides a range of loan products comprising mortgage and home equity loans, secured and unsecured commercial and consumer loans, lines of credit, construction financing, farm loans, community development loans, loans to non-profit entities, and local government loans. In addition, the company offers trust, retail investment, wealth management, and insurance services; and provides online banking, telephone banking, cash management, and automated teller services, as well as safe deposit boxes. The company was founded in 1868 and is headquartered in Harrisburg, Pennsylvania.