CVB Financial (CVBF) versus Great Western Bancorp (GWB) Financial Comparison

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CVB Financial (NYSE: GWB) and Great Western Bancorp (NYSE:GWB) are both mid-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, risk, profitability and valuation.

Volatility & Risk

CVB Financial has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, Great Western Bancorp has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500.

Profitability

This table compares CVB Financial and Great Western Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CVB Financial 34.66% 12.20% 1.59%
Great Western Bancorp 28.45% 9.36% 1.41%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for CVB Financial and Great Western Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CVB Financial 0 5 0 0 2.00
Great Western Bancorp 0 3 5 0 2.63

CVB Financial currently has a consensus price target of $25.13, suggesting a potential upside of 4.73%. Great Western Bancorp has a consensus price target of $46.25, suggesting a potential upside of 4.78%. Given Great Western Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Great Western Bancorp is more favorable than CVB Financial.

Dividends

CVB Financial pays an annual dividend of $0.56 per share and has a dividend yield of 2.3%. Great Western Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. CVB Financial pays out 52.3% of its earnings in the form of a dividend. Great Western Bancorp pays out 40.7% 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. CVB Financial has increased its dividend for 4 consecutive years and Great Western Bancorp has increased its dividend for 2 consecutive years. CVB Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares CVB Financial and Great Western Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CVB Financial $329.34 million 8.03 $104.41 million $1.07 22.42
Great Western Bancorp $497.73 million 5.22 $144.78 million $2.46 17.94

Great Western Bancorp has higher revenue and earnings than CVB Financial. Great Western Bancorp 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 and Institutional Ownership

70.4% of CVB Financial shares are held by institutional investors. 6.9% of CVB Financial shares are held by insiders. Comparatively, 0.3% of Great Western Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

CVB Financial beats Great Western Bancorp on 9 of the 17 factors compared between the two stocks.

CVB Financial Company Profile

CVB Financial Corp. operates as a bank holding company for Citizens Business Bank that provides banking, lending, and investment services. It operates in two segments, Banking Centers; and Dairy & Livestock and Agribusiness. The company offers checking, savings, and money market accounts, as well as time certificates of deposit; and serves as a federal tax depository for business customers. It also provides commercial lending products comprising lines of credit and other working capital financing, accounts receivable lending, and letters of credit; 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 that are secured by owner-occupied and investor owned properties; 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, the company offers various specialized services, such as cash management systems for monitoring cash flow, a credit card program for merchants, courier pick-up and delivery, payroll services, remote deposit capture, electronic funds transfer, and online account access. Further, it provides trust and investment-related services to customers through its CitizensTrust Division, such as fiduciary services, mutual funds, annuities, 401(k) plans, and individual investment accounts. The company's customers consist primarily of small to mid-sized businesses and individuals located in the Inland Empire, Los Angeles County, Orange County, San Diego County, Ventura County, Santa Barbara County, and the Central Valley area of California. As of April 18, 2018, the company operated 51 banking centers and 3 trust office locations. CVB Financial Corp. was founded in 1974 and is headquartered in Ontario, California.

Great Western Bancorp Company Profile

Great Western Bancorp, Inc. operates as the bank holding company for Great Western Bank that provides business and agribusiness banking, retail banking, and wealth management services. The company offers non-interest-bearing demand accounts, interest-bearing savings and money market accounts, individual retirement accounts, and time certificates of deposits, as well as NOW accounts. It also provides agricultural loans; commercial and industrial loans, including working capital and other shorter-term lines of credit, fixed-rate and variable rate loans; commercial real estate (CRE) loans comprising owner-occupied and non-owner-occupied CRE loans, multifamily residential real estate loans, and construction and development loans; short-term working capital funding, long-term land-related lending, and other tailored services; and residential mortgage, home equity, home equity lines of credit and general lines of credit, and auto loans and other loans. In addition, the company offers cash management services, online business deposit, and wire transfer services; credit cards; crop insurance; online, telephone, and mobile banking services; and wealth management solutions consisting of financial planning, private banking, investment management, and trust services through associations with third party vendors, including a registered broker-dealer and investment adviser. It serves retail customers; grain and protein producers; and small and mid-sized businesses in various industries, including ancillary agribusiness services, freight and transport, healthcare, and tourism. As of September 30, 2017, the company's branch network consisted of 173 branches located in 129 communities in Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota, as well as operated 162 ATMs and 21 company-owned ATMs at off-site locations. The company was founded in 1935 and is based in Sioux Falls, South Dakota.

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