California BanCorp (NASDAQ:BCAL) & SB Financial Group (NASDAQ:SBFG) Critical Comparison

SB Financial Group (NASDAQ:SBFG) and California BanCorp (NASDAQ:BCAL) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Institutional and Insider Ownership

66.7% of SB Financial Group shares are owned by institutional investors. Comparatively, 55.4% of California BanCorp shares are owned by institutional investors. 6.0% of SB Financial Group shares are owned by insiders. Comparatively, 8.1% of California BanCorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

SB Financial Group pays an annual dividend of $0.64 per share and has a dividend yield of 2.3%. California BanCorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.2%. SB Financial Group pays out 24.0% of its earnings in the form of a dividend. California BanCorp pays out 26.8% 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. SB Financial Group has raised its dividend for 12 consecutive years. SB Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares SB Financial Group and California BanCorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SB Financial Group	17.17%	11.47%	1.04%
California BanCorp	25.47%	10.09%	1.45%

Earnings and Valuation

This table compares SB Financial Group and California BanCorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SB Financial Group	$91.03 million	1.95	$13.97 million	$2.67	10.65
California BanCorp	$237.07 million	2.96	$63.06 million	$1.79	12.17

California BanCorp has higher revenue and earnings than SB Financial Group. SB Financial Group is trading at a lower price-to-earnings ratio than California BanCorp, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

SB Financial Group has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500. Comparatively, California BanCorp has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for SB Financial Group and California BanCorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SB Financial Group	0	2	0	1	2.67
California BanCorp	0	1	5	0	2.83

SB Financial Group presently has a consensus price target of $32.00, suggesting a potential upside of 12.56%. California BanCorp has a consensus price target of $24.50, suggesting a potential upside of 12.44%. Given SB Financial Group’s higher possible upside, analysts clearly believe SB Financial Group is more favorable than California BanCorp.

Summary

California BanCorp beats SB Financial Group on 10 of the 18 factors compared between the two stocks.

About SB Financial Group

SB Financial Group, Inc. operates as the financial holding company for the State Bank and Trust Company that provides a range of commercial banking and wealth management services to individual and corporate customers primarily in Ohio, Indiana, and Michigan. It offers checking, savings, money market accounts, as well as time certificates of deposit; and commercial, consumer, agricultural, and residential mortgage loans. The company also provides automatic teller machine, personal and corporate trust, commercial leasing, bank credit card, safe deposit box rental, internet banking, private client group, and other personalized banking products and services; and various trust and financial services comprising asset management services for individuals and corporate employee benefit plans, as well as brokerage services. In addition, it sells insurance products to retail and commercial customers. The company was formerly known as Rurban Financial Corp. and changed its name to SB Financial Group, Inc. in April 2013. SB Financial Group, Inc. was founded in 1902 and is based in Defiance, Ohio.

About California BanCorp

Southern California Bancorp operates as the holding company for Bank of Southern California, N.A. that provides various financial products to individuals, professionals, and small-to medium-sized businesses. The company offers checking, personal and business savings, and money market accounts, as well as certificates of deposit. It also provides home equity lines of credit, business loans and lines of credit, commercial real estate and construction loans, small business administration loans, letters of credit, and personal and business credit cards. In addition, the company provides cash vault, sweep accounts, and remote deposit capture services; online and mobile banking services; courier service; lockbox services; and merchant services. It operates branches in San Diego, Orange, Ventura, Los Angeles, and Riverside counties, as well as the Inland Empire. The company was founded in 2001 and is headquartered in San Diego, California.