Riverview Bancorp (NASDAQ:RVSB – Get Free Report) and Preferred Bank (NASDAQ:PFBC – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, valuation, analyst recommendations, profitability and earnings.
Profitability
This table compares Riverview Bancorp and Preferred Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Riverview Bancorp | -5.87% | 3.12% | 0.32% |
| Preferred Bank | 26.54% | 17.27% | 1.77% |
Analyst Recommendations
This is a summary of recent recommendations and price targets for Riverview Bancorp and Preferred Bank, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Riverview Bancorp | 1 | 1 | 0 | 0 | 1.50 |
| Preferred Bank | 0 | 5 | 2 | 0 | 2.29 |
Institutional & Insider Ownership
69.6% of Riverview Bancorp shares are held by institutional investors. Comparatively, 72.8% of Preferred Bank shares are held by institutional investors. 3.9% of Riverview Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Risk and Volatility
Riverview Bancorp has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500. Comparatively, Preferred Bank has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.
Earnings and Valuation
This table compares Riverview Bancorp and Preferred Bank”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Riverview Bancorp | $64.74 million | 1.60 | -$4.34 million | ($0.19) | -27.27 |
| Preferred Bank | $505.97 million | 2.95 | $133.63 million | $10.94 | 9.44 |
Preferred Bank has higher revenue and earnings than Riverview Bancorp. Riverview Bancorp is trading at a lower price-to-earnings ratio than Preferred Bank, indicating that it is currently the more affordable of the two stocks.
Dividends
Riverview Bancorp pays an annual dividend of $0.08 per share and has a dividend yield of 1.5%. Preferred Bank pays an annual dividend of $3.20 per share and has a dividend yield of 3.1%. Riverview Bancorp pays out -42.1% of its earnings in the form of a dividend. Preferred Bank pays out 29.3% 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. Preferred Bank has raised its dividend for 5 consecutive years. Preferred Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Preferred Bank beats Riverview Bancorp on 15 of the 17 factors compared between the two stocks.
About Riverview Bancorp
Riverview Bancorp, Inc. operates as a bank holding company for Riverview Bank that provides commercial banking services to small and medium size businesses, professionals, and wealth building individuals. It offers a range of deposit products, including demand deposits, negotiable order of withdrawal accounts, money market accounts, savings accounts, certificates of deposit, and retirement savings plans. The company also provides commercial business, commercial and residential real estate, multi-family real estate, land, real estate construction, and one-to-four family mortgage loans; other consumer loans, such as automobile, boat, motorcycle, recreational vehicle, savings account, and unsecured loans; and home equity lines of credit. In addition, it is involved in the provision of mortgage brokerage and mortgage loan servicing activities, as well as offers asset management services comprising trust, estate planning, and investment management. The company operates in Camas, Washougal, Stevenson, White Salmon, Battle Ground, Goldendale, Ridgefield, and Vancouver, Washington, as well as Portland, Gresham, Tualatin, and Aumsville, Oregon. Riverview Bancorp, Inc. was founded in 1923 and is based in Vancouver, Washington.
About Preferred Bank
Preferred Bank provides various commercial banking products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals. The company accepts checking, savings, and money market deposit accounts; fixed-rate and fixed maturity retail, and non-retail certificates of deposit; and individual retirement accounts. It also provides real estate mortgage loans that are secured by retail, industrial, office, special purpose, and residential single and multi-family properties; real estate construction loans; commercial loans comprising lines of credit for working capital, term loans for capital expenditures, and commercial and stand-by letters of credit; and small business administration loans. In addition, the company offers trade finance services, including commercial and export letters of credit, import lines of credit, documentary collections, international wire transfers, acceptances/trust receipt financing products, export financing, and bills purchase programs. Further, it provides cash management services; and internet, mobile, and tablet banking services. The company operates through full-service branch offices in the California counties of Los Angeles, Orange and San Francisco; Flushing, New York; Houston suburb of Sugar Land, Texas; and a satellite office in Manhattan, New York. The company was incorporated in 1991 and is headquartered in Los Angeles, California.
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