Financial Analysis: CB Financial Services (CBFV) vs. Western Alliance Bancorporation (WAL)

CB Financial Services (NASDAQ: CBFV) and Western Alliance Bancorporation (NYSE:WAL) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Valuation & Earnings

This table compares CB Financial Services and Western Alliance Bancorporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CB Financial Services $40.23 million 4.17 $6.94 million $1.67 18.56
Western Alliance Bancorporation $890.86 million 6.72 $325.49 million $3.10 18.25

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

Dividends

CB Financial Services pays an annual dividend of $0.88 per share and has a dividend yield of 2.8%. Western Alliance Bancorporation does not pay a dividend. CB Financial Services pays out 52.7% of its earnings in the form of a dividend.

Insider & Institutional Ownership

16.9% of CB Financial Services shares are held by institutional investors. Comparatively, 83.7% of Western Alliance Bancorporation shares are held by institutional investors. 10.6% of CB Financial Services shares are held by insiders. Comparatively, 7.5% of Western Alliance Bancorporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

CB Financial Services has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, Western Alliance Bancorporation has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500.

Profitability

This table compares CB Financial Services and Western Alliance Bancorporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CB Financial Services 13.37% 6.90% 0.69%
Western Alliance Bancorporation 38.48% 16.68% 1.83%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for CB Financial Services and Western Alliance Bancorporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CB Financial Services 0 1 1 0 2.50
Western Alliance Bancorporation 0 1 11 0 2.92

CB Financial Services currently has a consensus price target of $35.00, suggesting a potential upside of 12.90%. Western Alliance Bancorporation has a consensus price target of $67.96, suggesting a potential upside of 20.09%. Given Western Alliance Bancorporation’s stronger consensus rating and higher possible upside, analysts plainly believe Western Alliance Bancorporation is more favorable than CB Financial Services.

Summary

Western Alliance Bancorporation beats CB Financial Services on 13 of the 16 factors compared between the two stocks.

CB Financial Services Company Profile

CB Financial Services, Inc. operates as the bank holding company for Community Bank that provides various banking products and services for individuals and businesses in southwestern Pennsylvania. The company's deposit products include demand deposits, NOW accounts, money market accounts, savings accounts, and time deposits. Its loan products comprise residential real estate loans, such as one-to four-family mortgage loans, multifamily mortgage loans, home equity installment loans, and home equity lines of credit; commercial real estate loans that are secured primarily by improved properties, such as retail facilities, office buildings, and other non-residential buildings; construction loans to individuals to finance the construction of residential dwellings, as well as for the construction of commercial properties, including hotels, apartment buildings, housing developments, and owner-occupied properties used for businesses; commercial and industrial loans, and lines of credit; consumer loans consisting of indirect auto loans, secured and unsecured loans, and lines of credit; and other loans. In addition, the company provides sweep and insured money sweep, remote electronic deposit, online banking with bill pay, mobile banking, and automated clearing house services; and conducts insurance brokerage activities by offering property and casualty, commercial liability, surety, and other insurance products. As of May 16, 2018, it operated 16 offices in Greene, Allegheny, Washington, Fayette, and Westmoreland counties in southwestern Pennsylvania; 7 offices in Brooke, Marshall, Ohio, Upshur, and Wetzel counties in West Virginia; and 1 office in Belmont County in Ohio. The company was founded in 1901 and is headquartered in Carmichaels, Pennsylvania.

Western Alliance Bancorporation Company Profile

Western Alliance Bancorporation operates as the holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. The company offers deposit products, including checking accounts, savings accounts, and money market accounts, as well as fixed-rate and fixed maturity certificates of deposit accounts. It also offers commercial and industrial loan products, such as working capital lines of credit, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans; commercial real estate loans, which are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties; construction and land development loans for single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments; and consumer loans. In addition, the company provides other financial services, such as Internet banking, wire transfers, electronic bill payment and presentment, lock box services, courier, and cash management services. Further, it holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. As of December 31, 2017, the company operated 38 branch locations and 8 loan production offices. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona.

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