Community West Bancshares (NASDAQ:CWBC) and Security Federal Co. (SC) (OTCMKTS:SFDL) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.
Valuation & Earnings
This table compares Community West Bancshares and Security Federal Co. (SC)’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Community West Bancshares||$45.26 million||1.83||$7.41 million||N/A||N/A|
|Security Federal Co. (SC)||$40.74 million||2.50||$7.21 million||N/A||N/A|
Community West Bancshares has higher revenue and earnings than Security Federal Co. (SC).
This table compares Community West Bancshares and Security Federal Co. (SC)’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Community West Bancshares||14.44%||8.91%||0.77%|
|Security Federal Co. (SC)||17.34%||9.20%||0.82%|
Risk & Volatility
Community West Bancshares has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500. Comparatively, Security Federal Co. (SC) has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.
Institutional and Insider Ownership
24.4% of Community West Bancshares shares are held by institutional investors. Comparatively, 1.9% of Security Federal Co. (SC) shares are held by institutional investors. 21.8% of Community West Bancshares shares are held by company insiders. Comparatively, 37.7% of Security Federal Co. (SC) shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Community West Bancshares pays an annual dividend of $0.22 per share and has a dividend yield of 2.2%. Security Federal Co. (SC) pays an annual dividend of $0.40 per share and has a dividend yield of 1.2%. Community West Bancshares has increased its dividend for 3 consecutive years. Community West Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of current ratings and price targets for Community West Bancshares and Security Federal Co. (SC), as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Community West Bancshares||0||0||0||0||N/A|
|Security Federal Co. (SC)||0||0||0||0||N/A|
Security Federal Co. (SC) beats Community West Bancshares on 7 of the 12 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 deposit, as well as 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, as well as 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 professional organizations. It operates a network of eight branch banking offices in Goleta, Oxnard, San Luis Obispo, Santa Barbara, Santa Maria, Ventura, Paso Robles, and Westlake Village. Community West Bancshares was founded in 1989 and is headquartered in Goleta, California.
About Security Federal Co. (SC)
Security Federal Corporation operates as the holding company for Security Federal Bank that provides various banking products and services. It accepts various deposit products, such as savings accounts, checking accounts, various money market accounts, fixed interest rate certificates, negotiated rate jumbo certificates of deposit, and individual retirement accounts. The company also originates commercial real estate loans, commercial business loans, and consumer loans, as well as mortgage loans to buy or refinance one-to-four family residential real estate; and construction loans on single-family residences, multi-family dwellings and projects, and commercial real estate. In addition, it provides loans for the acquisition, development, and construction of residential subdivisions and commercial projects. Further, the company offers trust, financial planning, and financial management services; and operates an insurance agency that offers auto, business, life, health, and home insurance products, as well as provides insurance premium financing services. It operates 16 full service branch offices in Aiken, Ballentine, Clearwater, Columbia, Graniteville, Langley, Lexington, North Augusta, Ridge Spring, Wagener, and West Columbia, South Carolina, as well as in Evans, Georgia. The company was founded in 1922 and is headquartered in Aiken, South Carolina.
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