Preferred Bank (NASDAQ: CBFP – Get a rating) and BayCom (NASDAQ: BCML – Get a rating) are both small cap finance companies, but which is the better company? We’ll compare the two companies based on the strength of their profitability, institutional ownership, valuation, dividends, risk, analyst recommendations and earnings.
Valuation and benefits
This chart compares revenue, earnings per share (EPS), and valuation of Preferred Bank and BayCom.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|Preferred bank||$218.78 million||4.68||$95.24 million||$6.74||10.09|
|BayCom||$92.88 million||3.05||$20.69 million||$2.02||10.24|
Preferred Bank has higher revenues and profits than BayCom. Preferred Bank trades at a lower price-to-earnings ratio than BayCom, indicating that it is currently the more affordable of the two stocks.
This table compares the net margins, return on equity and return on assets of Preferred Bank and BayCom.
|Net margins||Return on equity||return on assets|
Preferred Bank pays an annual dividend of $1.72 per share and has a dividend yield of 2.5%. BayCom pays an annual dividend of $0.20 per share and has a dividend yield of 1.0%. Preferred Bank pays 25.5% of its profits as a dividend. BayCom pays 9.9% of its earnings as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Preferred Bank has increased its dividend for 1 consecutive years. Preferred Bank is clearly the better dividend-paying stock, given its higher yield and longer track record of dividend growth.
Institutional and insider ownership
73.2% of Preferred Bank shares are held by institutional investors. By comparison, 47.1% of BayCom’s shares are held by institutional investors. 7.6% of BayCom shares are held by insiders. Strong institutional ownership indicates that large money managers, endowments, and hedge funds believe a company will outperform the market over the long term.
This is a summary of the current ratings and recommendations for Preferred Bank and BayCom, as reported by MarketBeat.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
|BayCom||0||0||0||0||N / A|
Preferred Bank currently has a consensus target price of $89.60, suggesting a potential upside of 31.73%. BayCom has a consensus target price of $28.00, suggesting a potential upside of 35.40%. Given BayCom’s possible higher upside, analysts clearly think BayCom is more favorable than Preferred Bank.
Volatility and risk
Preferred Bank has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, BayCom has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.
Preferred Bank beats BayCom on 12 out of 16 factors compared between the two stocks.
Preferred banking company profile (Get a rating)
Preferred Bank provides a variety of commercial banking products and services to small and medium-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals and high net worth individuals in the United States. The company accepts checking, savings and money market deposit accounts; fixed-rate, fixed-maturity certificates of deposit for individuals and individuals; and individual retirement accounts. It also offers real estate mortgage loans secured by commercial, industrial, office, special purpose, and single and multi-family residential properties; housing construction loans; and commercial loans including working capital lines of credit, term loans for capital expenditures and commercial and standby letters of credit; and SBA loans. In addition, the Company offers trade finance services, including trade and export letters of credit, import lines of credit, documentary collections, international wire transfers, acceptances/ trust receipts, export financing, documentary collections and invoice purchase programs. Also, it provides various banking services to wealthy individuals residing in the Pacific Rim area; and remote deposit taking, and online and mobile banking. In addition, the company offers various banking services to doctors, accountants, lawyers, business owners and other professionals; and safe deposit boxes, account reconciliation, courier service and cash management services to manufacturing, service and distribution companies. As of December 31, 2021, it had eleven full-service branches in Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Pico Rivera, Tarzana and San Francisco; and a branch in Flushing, New York. The company was incorporated in 1991 and is headquartered in Los Angeles, California.
BayCom Company Profile (Get a rating)
BayCom Corp operates as a bank holding company for United Business Bank which provides various financial services to small and medium businesses, service professionals and individuals. The company offers current, savings, money market and term accounts. It also offers commercial and multi-family real estate loans, including home loans for homeowners and investors; 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 including installment loans, secured and unsecured personal lines of credit and overdraft protection. In addition, the Company offers online and mobile banking, ATMs, remote deposits, overnight deposits, couriers, direct deposits, cash management, wire transfers, room services automated clearing, debit cards, cashier’s and travelers checks, letters of credit, lockbox, positive payment, reverse positive payment and account reconciliation services, as well as zero balance accounts and transfer accounts, including including loan transfer. As of December 31, 2021, it operated through a network of 33 full-service bank branches in Northern and Southern California; 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.
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