Financial Review: Luther Burbank (LBC) vs. Village Bank and Trust Financial (VBFC)

Luther Burbank (NASDAQ:LBC) and Village Bank and Trust Financial (NASDAQ:VBFC) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Insider and Institutional Ownership

23.0% of Luther Burbank shares are held by institutional investors. Comparatively, 4.9% of Village Bank and Trust Financial shares are held by institutional investors. 20.8% of Luther Burbank shares are held by insiders. Comparatively, 9.3% of Village Bank and Trust Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Luther Burbank has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Village Bank and Trust Financial has a beta of -0.01, indicating that its stock price is 101% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Luther Burbank and Village Bank and Trust Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Luther Burbank 0 3 0 0 2.00
Village Bank and Trust Financial 0 0 0 0 N/A

Luther Burbank presently has a consensus target price of $11.83, indicating a potential upside of 15.22%. Given Luther Burbank’s higher probable upside, equities research analysts plainly believe Luther Burbank is more favorable than Village Bank and Trust Financial.

Profitability

This table compares Luther Burbank and Village Bank and Trust Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Luther Burbank 18.64% 8.04% 0.68%
Village Bank and Trust Financial 11.05% 8.59% 0.60%

Earnings and Valuation

This table compares Luther Burbank and Village Bank and Trust Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Luther Burbank $230.19 million 2.52 $45.06 million $0.79 13.00
Village Bank and Trust Financial $27.26 million 1.82 $3.04 million N/A N/A

Luther Burbank has higher revenue and earnings than Village Bank and Trust Financial.

Dividends

Luther Burbank pays an annual dividend of $0.23 per share and has a dividend yield of 2.2%. Village Bank and Trust Financial does not pay a dividend. Luther Burbank pays out 29.1% of its earnings in the form of a dividend.

Summary

Luther Burbank beats Village Bank and Trust Financial on 10 of the 12 factors compared between the two stocks.

About Luther Burbank

Luther Burbank Corporation operates as the bank holding company for Luther Burbank Savings that provides various banking products and services for individuals, entrepreneurs, professionals, and businesses in the United States. The company offers interest and noninterest-bearing transaction accounts, certificates of deposit, and money market accounts. It also provides commercial real estate loans, including first mortgage loans for the purchase, refinance, or build-out of tenant improvements on investor owned multifamily residential properties, as well as loans for the purchase, refinance, or improvement of office, retail, and light industrial properties; and single family residential loans. In addition, the company offers ATM machines, debit cards, and online and mobile banking services. As of January 25, 2018, it had nine banking branch locations in Northern and Southern California; and eight lending offices in California, Seattle, Washington, and Portland, Oregon. Further, the company engages in the real estate investment activities; and issues trust preferred securities. Luther Burbank Corporation was founded in 1983 and is headquartered in Santa Rosa, California.

About Village Bank and Trust Financial

Village Bank and Trust Financial Corp. operates as the bank holding company for Village Bank that provides banking and related financial services to small and medium sized businesses, professionals, and individuals. The company operates in two segments, Traditional Commercial Banking and Mortgage Banking. It accepts checking, savings, money market, and individual retirement accounts, as well as certificates of deposit and other depository services. The company also provides secured and unsecured commercial loans to small- and medium-sized businesses for various purposes, such as funding working capital needs, business expansion, and purchase of equipment and machinery; loans for acquiring, developing, constructing, and owning commercial real estate properties; and secured and unsecured consumer loans for financing automobiles, home improvements, education, and personal investments, as well as originates residential mortgage loans for sale in the secondary market. In addition, it offers online banking, mobile banking, and remote deposit capture services for business clients. The company provides its products and services through 10 full-service branch banking offices and 1 mortgage loan production office in Central Virginia in the counties of Chesterfield, Hanover, Henrico, Powhatan, and James City. Village Bank and Trust Financial Corp. was founded in 1999 and is headquartered in Midlothian, Virginia.

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