Critical Analysis of Truxton (OTCMKTS: TRUX) vs. Community West Bancshares (NASDAQ: CWBC)


Truxton (OTCMKTS: TRUXGet a rating) and Community West Bancshares (NASDAQ: CWBCGet a rating) are both small cap finance companies, but which is the better investment? We’ll compare the two companies based on their dividend strength, risk, earnings, profitability, institutional ownership, valuation, and analyst recommendations.

Analyst Recommendations

This is a summary of the current recommendations and price targets for Truxton and Community West Bancshares, as provided by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Truxton 0 0 0 0 N / A
West Bancshares Community 0 1 0 0 2.00

Dividends

Truxton pays an annual dividend of $1.36 per share and has a dividend yield of 1.9%. Community West Bancshares pays an annual dividend of $0.28 per share and has a dividend yield of 2.0%. Truxton pays 27.1% of its profits as a dividend. Community West Bancshares pays 18.7% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Community West Bancshares has increased its dividend for 1 consecutive years. Community West Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares the net margins, return on equity and return on assets of Truxton and Community West Bancshares.

Net margins Return on equity return on assets
Truxton 37.11% N / A N / A
West Bancshares Community 26.29% 13.53% 1.20%

Benefits and evaluation

This table compares revenue, earnings per share and valuation of Truxton and Community West Bancshares.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Truxton $39.19 million 5:30 p.m. $14.54 million $5.01 14.22
West Bancshares Community $49.83 million 2.43 $13.10 million $1.50 9:30 a.m.

Truxton has higher earnings, but lower earnings than Community West Bancshares. Community West Bancshares trades at a lower price-to-earnings ratio than Truxton, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

0.8% of Truxton shares are held by institutional investors. By comparison, 26.4% of Community West Bancshares shares are held by institutional investors. 23.0% of the shares of Community West Bancshares are held by insiders of the company. Strong institutional ownership indicates that hedge funds, endowments, and large fund managers believe a company is poised for long-term growth.

Risk and Volatility

Truxton has a beta of 0.69, suggesting its stock price is 31% less volatile than the S&P 500. Comparatively, Community West Bancshares has a beta of 1, suggesting its stock price has a volatility profile similar to that of the S&P 500.

Summary

Community West Bancshares beats Truxton on 9 of the 14 factors compared between the two stocks.

Truxton Company Profile (Get a rating)

Truxton Corporation, through Truxton Trust Company, provides a variety of banking, investment management and trust administration services to individuals, businesses and charitable institutions. The Company’s primary deposit products include current and money market accounts, as well as certificates of deposit; and major lending products include residential and commercial real estate loans, business loans, construction and land development loans, and consumer loans. It also provides private banking, wealth management, trust and family office services; real estate and loan services; and corporate banking, commercial lending and cash management. The company was formerly known as NBT Holdings Inc. and changed its name to Truxton Corporation in May 2013. Truxton Corporation was founded in 2004 and is based in Nashville, Tennessee.

West Bancshares Company Profile (Get a rating)

Community West Bancshares operates as a bank holding company for Community West Bank, NA, which provides various financial products and services in California. The Company offers deposit products, such as checking accounts, savings accounts, money market accounts, and certificates of deposit with fixed rates and fixed maturities; and cash management products. It also offers commercial real estate, commercial real estate, consumer, manufactured housing and small business administration loans, as well as agricultural loans for real estate and farm lines; home equity lines of credit secured by residential real estate; single-family real estate loans; and installment loans consisting of auto and general purpose loans. The company serves small and medium-sized businesses and their owners, professionals, high net worth individuals and non-profit organizations. It operates through a network of seven bank branches in Goleta, Santa Barbara, Santa Maria, Ventura, San Luis Obispo, Oxnard and Paso Robles. Community West Bancshares was founded in 1989 and is headquartered in Goleta, California.



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