Cascade Bancorp (NASDAQ: CACB) and Sierra Bancorp (NASDAQ:BSRR) are both small-cap financials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, institutional ownership, profitabiliy, valuation and earnings.

Insider & Institutional Ownership

82.1% of Cascade Bancorp shares are held by institutional investors. Comparatively, 48.3% of Sierra Bancorp shares are held by institutional investors. 10.1% of Cascade Bancorp shares are held by company insiders. Comparatively, 15.2% of Sierra Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Cascade Bancorp and Sierra Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cascade Bancorp 20.91% 7.25% 0.87%
Sierra Bancorp 20.02% 8.77% 0.94%

Analyst Recommendations

This is a breakdown of current recommendations for Cascade Bancorp and Sierra Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cascade Bancorp 0 0 0 0 N/A
Sierra Bancorp 0 2 1 0 2.33

Sierra Bancorp has a consensus target price of $26.75, indicating a potential upside of 5.81%. Given Sierra Bancorp’s higher possible upside, analysts plainly believe Sierra Bancorp is more favorable than Cascade Bancorp.

Valuation and Earnings

This table compares Cascade Bancorp and Sierra Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cascade Bancorp $127.30 million 4.12 $18.03 million $0.24 29.13
Sierra Bancorp $86.34 million 4.05 $17.84 million $1.29 19.60

Cascade Bancorp has higher revenue and earnings than Sierra Bancorp. Sierra Bancorp is trading at a lower price-to-earnings ratio than Cascade Bancorp, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Cascade Bancorp has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Sierra Bancorp has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Dividends

Sierra Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 2.2%. Cascade Bancorp does not pay a dividend. Sierra Bancorp pays out 43.4% of its earnings in the form of a dividend.

Summary

Sierra Bancorp beats Cascade Bancorp on 8 of the 15 factors compared between the two stocks.

Cascade Bancorp Company Profile

Cascade Bancorp is a United States-based bank holding company. The Company operates through its subsidiary, Bank of the Cascades (the Bank). The Bank is an Oregon state chartered bank. The Bank offers a range of commercial and retail banking services to its customers. It provides commercial real estate loans, real estate construction and development loans, and commercial and industrial loans, as well as consumer installment, line-of-credit, credit card and home equity loans. It also originates residential mortgage loans. It provides consumer and business deposit services, including checking, money market, time deposit accounts and related payment services, Internet banking, electronic bill payment and remote deposits. It provides trust and investment related services. As of December 31, 2015, the Bank operated 37 branches serving communities in Central, Southern and Northwest Oregon, as well as in the greater Boise/Treasure Valley, Idaho and Seattle, Washington areas.

Sierra Bancorp Company Profile

Sierra Bancorp is a bank holding company for Bank of the Sierra (the Bank). The Bank is a state-chartered bank, which offers a range of retail and commercial banking services. The Bank’s products and services are related to the business of lending money and accepting deposits. Its customers have access to electronic point-of-sale payment alternatives around the country through the Pulse Electronic Funds Transfer (EFT) network. Its Internet branch provides the ability to open deposit accounts online; an online banking option with bill-pay and mobile banking capabilities, including mobile check deposit; a customer service center that is accessible by toll-free telephone during business hours, and an automated telephone banking system. It offers a range of other banking products and services to complement and support its lending and deposit products, including remote deposit capture and automated payroll services for business customers.

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