Popular (NASDAQ:BPOP – Get Free Report) and Community West Bancshares (NASDAQ:CWBC – Get Free Report) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.
Profitability
This table compares Popular and Community West Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Popular | 21.37% | 15.34% | 1.26% |
| Community West Bancshares | 16.86% | 10.12% | 1.16% |
Earnings and Valuation
This table compares Popular and Community West Bancshares”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Popular | $3.20 billion | 3.20 | $833.16 million | $14.80 | 10.84 |
| Community West Bancshares | $196.20 million | 3.70 | $38.17 million | $1.85 | 14.47 |
Popular has higher revenue and earnings than Community West Bancshares. Popular 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.
Analyst Ratings
This is a summary of recent recommendations and price targets for Popular and Community West Bancshares, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Popular | 0 | 0 | 10 | 3 | 3.23 |
| Community West Bancshares | 0 | 2 | 3 | 1 | 2.83 |
Popular presently has a consensus price target of $187.42, suggesting a potential upside of 16.79%. Community West Bancshares has a consensus price target of $28.17, suggesting a potential upside of 5.22%. Given Popular’s stronger consensus rating and higher possible upside, research analysts plainly believe Popular is more favorable than Community West Bancshares.
Insider and Institutional Ownership
87.3% of Popular shares are held by institutional investors. Comparatively, 33.8% of Community West Bancshares shares are held by institutional investors. 2.1% of Popular shares are held by company insiders. Comparatively, 9.0% of Community West Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Volatility and Risk
Popular has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500. Comparatively, Community West Bancshares has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.
Dividends
Popular pays an annual dividend of $3.60 per share and has a dividend yield of 2.2%. Community West Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 1.8%. Popular pays out 24.3% of its earnings in the form of a dividend. Community West Bancshares pays out 25.9% 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. Popular has raised its dividend for 6 consecutive years. Popular is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Popular beats Community West Bancshares on 14 of the 18 factors compared between the two stocks.
About Popular
Popular, Inc., through its subsidiaries, provides various retail, mortgage, and commercial banking products and services in Puerto Rico, the United States, and the British Virgin Islands. The company provides savings, NOW, money market, and other interest-bearing demand accounts; non-interest bearing demand deposits; and certificates of deposit. It also offers commercial and industrial, commercial multi-family, commercial real estate, and residential mortgage loans; consumer loans, including personal loans, credit cards, automobile loans, home equity lines of credit, and other loans to individual borrowers; construction loans; and lease financing comprising automobile loans/leases. In addition, the company provides investment banking, auto and equipment leasing and financing, broker-dealer, and insurance services; debit cards; and online banking services. Popular, Inc. was founded in 1893 and is headquartered in Hato Rey, Puerto Rico.
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.
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