Reviewing Commonwealth Business Bank (OTCMKTS:CBBI) and Community Trust Bancorp (NASDAQ:CTBI)

Commonwealth Business Bank (OTCMKTS:CBBI) and Community Trust Bancorp (NASDAQ:CTBI) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, earnings and profitability.

Valuation & Earnings

This table compares Commonwealth Business Bank and Community Trust Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Commonwealth Business Bank	$122.69 million	N/A	$22.43 million	$1.80	5.95
Community Trust Bancorp	$273.56 million	3.54	$82.81 million	$5.17	10.34

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

Volatility and Risk

Commonwealth Business Bank has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500. Comparatively, Community Trust Bancorp has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Commonwealth Business Bank and Community Trust Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Commonwealth Business Bank	0	0	0	0	0.00
Community Trust Bancorp	0	0	3	0	3.00

Community Trust Bancorp has a consensus target price of $63.50, indicating a potential upside of 18.77%. Given Community Trust Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Community Trust Bancorp is more favorable than Commonwealth Business Bank.

Profitability

This table compares Commonwealth Business Bank and Community Trust Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Commonwealth Business Bank	15.89%	N/A	N/A
Community Trust Bancorp	23.24%	11.91%	1.48%

Insider and Institutional Ownership

60.2% of Community Trust Bancorp shares are held by institutional investors. 4.3% of Community Trust Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Commonwealth Business Bank pays an annual dividend of $0.50 per share and has a dividend yield of 4.7%. Community Trust Bancorp pays an annual dividend of $2.12 per share and has a dividend yield of 4.0%. Commonwealth Business Bank pays out 27.8% of its earnings in the form of a dividend. Community Trust Bancorp pays out 41.0% 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. Community Trust Bancorp has increased its dividend for 44 consecutive years. Commonwealth Business Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Community Trust Bancorp beats Commonwealth Business Bank on 14 of the 16 factors compared between the two stocks.

About Commonwealth Business Bank

CBB Bancorp, Inc. operates as the holding company for Commonwealth Business Bank that provides various commercial banking products and services to individuals and businesses in the United States. It offers checking, savings, money market, and certification of deposit accounts; SBA lending; business lines of credit; business term loans; business and commercial property loans; construction loans; and credit cards. The company also provides treasury management, and mobile and online banking services, as well as title and escrow services. In addition, it engages in investing activities; and offers trade finance services, including commercial letters of credit, standby letters of credit, and documentary collection services. The company offers its services through full-service and limited-service branches in Southern California, Dallas, Texas and Honolulu, and Hawaii; and loan production offices in the states of Colorado, Georgia, Texas, and Washington. CBB Bancorp, Inc. was founded in 2005 and is headquartered in Los Angeles, California.

About Community Trust Bancorp

Community Trust Bancorp, Inc. operates as the bank holding company for Community Trust Bank, Inc. that engages in the provision of commercial and personal banking, and trust and wealth management services to small and mid-sized communities in eastern, northeastern, central, and south-central Kentucky, as well as southern West Virginia, and northeastern Tennessee. The company accepts time and demand deposits, checking accounts, savings accounts and savings certificates, individual retirement accounts and Keogh plans, and money market accounts. Its loan portfolio includes commercial, construction, mortgage, and personal loans; lease-financing, lines of credit, revolving lines of credit, and term loans, as well as other specialized loans, including asset-based financing; residential and commercial real estate loans; and consumer loans. The company also provides cash management, renting safe deposit boxes, and funds transfer services; issues letters of credit; and acts as a trustee of personal trusts, executor of estates, trustee for employee benefit trusts, and paying agent for bond and stock issues, as well as an investment agent and depositor for securities. In addition, it offers securities brokerage services; debit cards; annuity and life insurance products; and repurchase agreements, as well as mobile, internet banking, and e-statement services. The company was founded in 1903 and is headquartered in Pikeville, Kentucky.