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

Profitability

This table compares Luther Burbank and Guaranty Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Luther Burbank N/A 5.87% 0.52%
Guaranty Bancorp 26.57% 12.61% 1.38%

Institutional and Insider Ownership

20.8% of Luther Burbank shares are held by institutional investors. Comparatively, 73.5% of Guaranty Bancorp shares are held by institutional investors. 20.4% of Luther Burbank shares are held by insiders. Comparatively, 13.3% of Guaranty Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Luther Burbank and Guaranty Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Luther Burbank $181.74 million 3.83 $69.38 million $1.42 8.66
Guaranty Bancorp $159.75 million 5.51 $38.62 million $1.53 19.64

Luther Burbank has higher revenue and earnings than Guaranty Bancorp. Luther Burbank is trading at a lower price-to-earnings ratio than Guaranty Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Luther Burbank and Guaranty Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Luther Burbank 0 3 0 0 2.00
Guaranty Bancorp 0 2 1 0 2.33

Luther Burbank presently has a consensus target price of $12.17, suggesting a potential downside of 1.08%. Guaranty Bancorp has a consensus target price of $34.17, suggesting a potential upside of 13.70%. Given Guaranty Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Guaranty Bancorp is more favorable than Luther Burbank.

Dividends

Luther Burbank pays an annual dividend of $0.23 per share and has a dividend yield of 1.9%. Guaranty Bancorp pays an annual dividend of $0.65 per share and has a dividend yield of 2.2%. Luther Burbank pays out 16.2% of its earnings in the form of a dividend. Guaranty Bancorp pays out 42.5% 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. Guaranty Bancorp has increased its dividend for 4 consecutive years. Guaranty Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Guaranty Bancorp beats Luther Burbank on 12 of the 16 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 Guaranty Bancorp

Guaranty Bancorp operates as the bank holding company for Guaranty Bank and Trust Company that provides various banking and other financial services to consumers, and small to medium-sized businesses. The company accepts deposit products, such as demand, interest-bearing demand, NOW, money market, IRA, and time deposits, and savings accounts, as well as certificates of deposit. It also offers loan products, including commercial, commercial and residential real estate, construction, and small business administration loans, as well as installment loans to individuals and other consumer loans that include overdraft protection, lines of credit, and other consumer loans. In addition, the company provides wealth management services comprising private banking, investment management, and trust services. As of December 31, 2017, it operated 32 branches located in Colorado's Front Range consisting of the Denver metropolitan area; and an investment management firms. The company was formerly known as Centennial Bank Holdings, Inc. and changed its name to Guaranty Bancorp in 2008. Guaranty Bancorp was incorporated in 2004 and is headquartered in Denver, Colorado.

Receive News & Ratings for Luther Burbank Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Luther Burbank and related companies with MarketBeat.com's FREE daily email newsletter.