CVB Financial Corp. (CVBF) and The Allstate Corporation (ALL) both have caught the attention of the investment community that recently hit new highs. This price action has ruffled more than a few feathers in the investment community, but is one a better investment than the other? To answer this, we will compare the two companies across growth, profitability, risk, return, dividends, and valuation measures.
The company has grown sales at a 12.60% annual rate over the past five years, putting it in the medium growth category. CVBF has a net profit margin of 43.50% and is more profitable than the average company in the Regional – Pacific Banks industry. In terms of efficiency, CVBF has an asset turnover ratio of 0.04. This figure represents the amount of revenue a company generates per dollar of assets. CVBF’s financial leverage ratio is 4.66, which indicates that the company’s asset base is primarily funded by debt. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is 10.20%, which is better than the Regional – Pacific Banks industry average ROE.
CVB Financial Corp. (CVBF) pays out an annual dividend of 0.72 per share. At the current valuation, this equates to a dividend yield of 3.60%. The company has a payout ratio of 44.90%. CVBF’s current dividend therefore should be sustainable. All else equal, companies with higher FCF yields are viewed as cheaper. Company trades at a P/E ratio of 13.51, and is more expensive than the average stock in the Regional – Pacific Banks industry. The average investment recommendation for CVBF, taken from a group of Wall Street Analysts, is 3.00, or a Hold.
Over the past six months, CVB Financial Corp. insiders have been net sellers, acquiring a net of 149291.0 shares. This implies that insiders have been feeling relatively bullish about the outlook for CVBF. Insider activity and sentiment signals are important to monitor because they can shed light on how “risky” a stock is perceived to be at it’s current valuation. Knowing this, it makes sense to look at beta, a measure of market risk. CVBF has a beta of 0.65 and therefore an below average level of market volatility.
The Allstate Corporation (NYSE:ALL) operates in the Property & Casualty Insurance segment of the Financial sector. ALL has increased sales at a 4.70% CAGR over the past five years, and is considered a low growth stock. The company has a net profit margin of 10.50% and is more profitable than the average Property & Casualty Insurance player. ALL’s asset turnover ratio is 0.43 and the company has financial leverage of 3.61. Company is therefore mostly financed by debt. ALL’s return on equity of 20.60% is better than the Property & Casualty Insurance industry average.
The Allstate Corporation (ALL) pays a dividend of 2.16, which translates to dividend yield of 2.17% based on the current price. Stock has a payout ratio of 13.70%. According to this ratio, ALL should be able to continue making payouts at these levels. The company trades at a free cash flow yield of 2.73 and has a P/E of 7.09. Compared to the average company in the 9.21 space, ALL is relatively cheap. The average analyst recommendation for ALL is 2.40, or a Moderate Sell.
The Allstate Corporation insiders have bought a net of 589350.0 shares during the past three months, which implies that the company’s top executives have been feeling bullish about the stock’s outlook. Finally, ALL’s beta of 0.95 indicates that the stock has an below average level of market risk.
The Allstate Corporation (NYSE:ALL) scores higher than CVB Financial Corp. (NASDAQ:CVBF) on 8 of the 12 measures compared between the two companies. ALL has the better fundamentals, scoring higher on growth, profitability, efficiency and leverage, return metrics. ALL has better insider activity and sentiment signals.
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May 03, 2020 at 08:30PM
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A Side-by-side Analysis of CVB Financial Corp. (CVBF) and The Allstate Corporation (ALL) - Weekly Oracle
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