Isabella Bank (OTCMKTS:ISBA) & CVB Financial (NASDAQ:CVBF) Critical Analysis

CVB Financial (NASDAQ:CVBF) and Isabella Bank (OTCMKTS:ISBA) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for CVB Financial and Isabella Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CVB Financial	0	4	2	0	2.33
Isabella Bank	0	1	0	0	2.00

CVB Financial currently has a consensus price target of $20.80, suggesting a potential upside of 7.44%. Isabella Bank has a consensus price target of $24.00, suggesting a potential upside of 10.85%. Given Isabella Bank’s higher probable upside, analysts clearly believe Isabella Bank is more favorable than CVB Financial.

Profitability

This table compares CVB Financial and Isabella Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CVB Financial	28.29%	9.80%	1.30%
Isabella Bank	13.43%	7.42%	0.73%

Earnings & Valuation

This table compares CVB Financial and Isabella Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CVB Financial	$665.66 million	4.04	$221.43 million	$1.43	13.48
Isabella Bank	$93.46 million	1.72	$18.17 million	$1.83	11.83

CVB Financial has higher revenue and earnings than Isabella Bank. Isabella Bank is trading at a lower price-to-earnings ratio than CVB Financial, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

CVB Financial has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, Isabella Bank has a beta of -0.03, meaning that its stock price is 103% less volatile than the S&P 500.

Dividends

CVB Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.2%. Isabella Bank pays an annual dividend of $1.12 per share and has a dividend yield of 5.2%. CVB Financial pays out 55.9% of its earnings in the form of a dividend. Isabella Bank pays out 61.2% 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.

Insider & Institutional Ownership

74.2% of CVB Financial shares are owned by institutional investors. 6.0% of CVB Financial shares are owned by company insiders. Comparatively, 9.7% of Isabella Bank shares are owned 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.

Summary

CVB Financial beats Isabella Bank on 12 of the 16 factors compared between the two stocks.

About CVB Financial

CVB Financial Corp. operates as a bank holding company for Citizens Business Bank, a state-chartered bank that provides banking and financial services to small to mid-sized businesses and individuals. It offers checking, savings, money market, and time certificates of deposit products for business and personal accounts; and serves as a federal tax depository for business customers. The company also provides commercial lending products comprising lines of credit and other working capital financing, accounts receivable lending, and letters of credit; agriculture 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; 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, it offers various specialized services, such as treasury management systems for monitoring cash flow, merchant card processing program, armored pick-up and delivery, payroll services, remote deposit capture, electronic funds transfers, wires and automated clearinghouse, and online account access. Further, the company provides trust services, such as fiduciary services, mutual funds, annuities, 401(k) plans, and individual investment accounts. CVB Financial Corp. was founded in 1974 and is headquartered in Ontario, California.

About Isabella Bank

Isabella Bank Corporation operates as the bank holding company for Isabella Bank that provides various banking products and services to businesses, institutions, and individuals and their families. Its deposit products include checking accounts, savings accounts, certificates of deposit, direct deposits, and money market accounts. The company's loan portfolio comprises commercial, agricultural, and residential real estate loans, as well as consumer loans, including secured and unsecured personal loans. It also offers cash management, mobile and internet banking, electronic bill pay, automated teller machines, trust and investment, estate planning, and safe deposit box rental services; and insurance products. The company operated banking offices in Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw counties. Isabella Bank Corporation was founded in 1903 and is headquartered in Mount Pleasant, Michigan.