Reviewing CVB Financial (CVBF) & Melrose Bancorp (MELR)

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Melrose Bancorp (NASDAQ:MELR) and CVB Financial (NASDAQ:CVBF) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Profitability

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

Net Margins Return on Equity Return on Assets
Melrose Bancorp 13.80% 3.81% 0.54%
CVB Financial 34.92% 11.11% 1.55%

Risk and Volatility

Melrose Bancorp has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500. Comparatively, CVB Financial has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Melrose Bancorp and CVB Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Melrose Bancorp 0 0 0 0 N/A
CVB Financial 0 5 1 0 2.17

CVB Financial has a consensus price target of $24.63, suggesting a potential upside of 15.83%. Given CVB Financial’s higher possible upside, analysts plainly believe CVB Financial is more favorable than Melrose Bancorp.

Dividends

Melrose Bancorp pays an annual dividend of $0.34 per share and has a dividend yield of 1.8%. CVB Financial pays an annual dividend of $0.56 per share and has a dividend yield of 2.6%. CVB Financial pays out 52.3% of its earnings in the form of a dividend. CVB Financial has increased its dividend for 4 consecutive years. CVB Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

20.8% of Melrose Bancorp shares are held by institutional investors. Comparatively, 62.6% of CVB Financial shares are held by institutional investors. 13.6% of Melrose Bancorp shares are held by insiders. Comparatively, 6.9% of CVB Financial shares are held by 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.

Earnings and Valuation

This table compares Melrose Bancorp and CVB Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Melrose Bancorp $10.58 million 4.72 $1.80 million N/A N/A
CVB Financial $329.34 million 9.06 $104.41 million $1.07 19.87

CVB Financial has higher revenue and earnings than Melrose Bancorp.

Summary

CVB Financial beats Melrose Bancorp on 12 of the 15 factors compared between the two stocks.

About Melrose Bancorp

Melrose Bancorp, Inc. operates as the bank holding company for Melrose Cooperative Bank that provides various banking products and services. The company accepts various deposits, such as noninterest-bearing demand accounts, money market accounts, savings accounts, NOW accounts, and certificates of deposit. Its loan products include one- to four-family residential real estate loans, home equity loans and lines of credit, commercial real estate loans, construction loans, and consumer loans. The company also provides online and mobile banking services; and buys, sells, and holds investment securities. It serves individuals, families, and businesses through a full-service banking office in Melrose, Massachusetts. Melrose Bancorp, Inc. was founded in 1890 and is based in Melrose, Massachusetts.

About CVB Financial

CVB Financial Corp. operates as a bank holding company for Citizens Business Bank that provides banking, lending, and investment services. It operates in two segments, Banking Centers; and Dairy & Livestock and Agribusiness. The company offers checking, savings, and money market accounts, as well as time certificates of deposit; and serves as a federal tax depository for business customers. It also provides commercial lending products comprising lines of credit and other working capital financing, accounts receivable lending, and letters of credit; 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 that are secured by owner-occupied and investor owned properties; 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, the company offers various specialized services, such as cash management systems for monitoring cash flow, a credit card program for merchants, courier pick-up and delivery, payroll services, remote deposit capture, electronic funds transfer, and online account access. Further, it provides trust and investment-related services to customers through its CitizensTrust Division, such as fiduciary services, mutual funds, annuities, 401(k) plans, and individual investment accounts. The company's customers consist primarily of small to mid-sized businesses and individuals located in the Inland Empire, Los Angeles County, Orange County, San Diego County, Ventura County, Santa Barbara County, and the Central Valley area of California. As of April 18, 2018, the company operated 51 banking centers and 3 trust office locations. CVB Financial Corp. was founded in 1974 and is headquartered in Ontario, California.

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