Financial Analysis: Community West Bancshares (NASDAQ:CWBC) and Pearl Diver Credit (NYSE:PDCC)

Pearl Diver Credit (NYSE:PDCC) and Community West Bancshares (NASDAQ:CWBC) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, dividends, valuation, profitability, institutional ownership, risk and analyst recommendations.

Institutional & Insider Ownership

33.8% of Community West Bancshares shares are owned by institutional investors. 9.0% of Community West Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Pearl Diver Credit and Community West Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pearl Diver Credit	N/A	N/A	N/A
Community West Bancshares	20.77%	10.44%	1.15%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Pearl Diver Credit and Community West Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pearl Diver Credit	0	0	0	0	0.00
Community West Bancshares	0	2	3	0	2.60

Community West Bancshares has a consensus target price of $28.17, indicating a potential upside of 4.32%. Given Community West Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe Community West Bancshares is more favorable than Pearl Diver Credit.

Valuation and Earnings

This table compares Pearl Diver Credit and Community West Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pearl Diver Credit	N/A	N/A	N/A	N/A	N/A
Community West Bancshares	$196.20 million	3.73	$38.17 million	$2.16	12.50

Community West Bancshares has higher revenue and earnings than Pearl Diver Credit.

Dividends

Pearl Diver Credit pays an annual dividend of $1.56 per share and has a dividend yield of 16.5%. Community West Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 1.8%. Community West Bancshares pays out 22.2% of its earnings in the form of a dividend.

Risk & Volatility

Pearl Diver Credit has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, Community West Bancshares has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

Summary

Community West Bancshares beats Pearl Diver Credit on 10 of the 12 factors compared between the two stocks.

About Pearl Diver Credit

Pearl Diver Credit Company Inc. is a newly organized, externally managed, non-diversified, closed-end management investment company. Its primary investment objective is to maximize its portfolio’s total return, with a secondary objective of generating high current income. Pearl Diver Credit Company Inc. is based in NEW YORK.

About Community West Bancshares

Community West Bancshares operates as the bank holding company for Community West Bank, N.A. that provides various financial products and services in California. The company offers deposit products, such as checking accounts, savings accounts, money market accounts, and fixed rate and fixed maturity certificates of deposits; and cash management products. It also provides commercial, commercial real estate, consumer, manufactured housing, and small business administration loans, as well as agricultural loans for real estate and operating lines; home equity lines of credit collateralized by residential real estate; single family real estate loans; and installment loans consisting of automobile and general-purpose loans. The company serves small to medium-sized businesses and their owners, professionals, high-net worth individuals, and non-profit organizations. Community West Bancshares was founded in 1989 and is headquartered in Goleta, California.