Financial Analysis: CBTX (NASDAQ:CBTX) & Bridge Bancorp (NASDAQ:BDGE)

CBTX (NASDAQ:CBTX) and Bridge Bancorp (NASDAQ:BDGE) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Profitability

This table compares CBTX and Bridge Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CBTX 30.50% 10.27% 1.56%
Bridge Bancorp 25.32% 10.95% 1.09%

Valuation & Earnings

This table compares CBTX and Bridge Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CBTX $137.51 million 5.68 $47.29 million $1.89 15.89
Bridge Bancorp $180.55 million 3.65 $39.23 million $2.66 12.50

CBTX has higher earnings, but lower revenue than Bridge Bancorp. Bridge Bancorp is trading at a lower price-to-earnings ratio than CBTX, indicating that it is currently the more affordable of the two stocks.

Dividends

CBTX pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. Bridge Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 2.8%. CBTX pays out 21.2% of its earnings in the form of a dividend. Bridge Bancorp pays out 34.6% 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. CBTX has increased its dividend for 1 consecutive years.

Insider & Institutional Ownership

28.4% of CBTX shares are owned by institutional investors. Comparatively, 59.1% of Bridge Bancorp shares are owned by institutional investors. 29.2% of CBTX shares are owned by insiders. Comparatively, 15.5% of Bridge Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for CBTX and Bridge Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CBTX 0 1 0 0 2.00
Bridge Bancorp 0 1 1 0 2.50

CBTX currently has a consensus target price of $31.00, indicating a potential upside of 3.20%. Bridge Bancorp has a consensus target price of $33.50, indicating a potential upside of 0.75%. Given CBTX’s higher possible upside, analysts clearly believe CBTX is more favorable than Bridge Bancorp.

Volatility and Risk

CBTX has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Bridge Bancorp has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Summary

CBTX beats Bridge Bancorp on 9 of the 17 factors compared between the two stocks.

CBTX Company Profile

CBTX, Inc. operates as the bank holding company for CommunityBank of Texas, National Association that provides commercial banking solutions to small and mid-sized businesses, and professionals in the United States. The company offers various deposit products, including demand, savings, money market, and time accounts; and loans, such as commercial and industrial loans, commercial real estate loans, construction and development loans, 1-4 family residential mortgage loans, multi-family residential loans, consumer loans, and agricultural loans. It also provides treasury and online banking services. CBTX, Inc. operates 35 banking locations, including 19 branches in Houston; 15 branches in Beaumont; and 1 branch in Dallas. The company was formerly known as CBFH, Inc. and changed its name to CBTX, Inc. in September 2017. CBTX, Inc. was founded in 2007 and is based in Houston, Texas.

Bridge Bancorp Company Profile

Bridge Bancorp, Inc. operates as the bank holding company for the BNB Bank that provide commercial and consumer banking products and services to small businesses, and municipal and consumer relationships. It accepts time, savings, and demand deposits. The company offers commercial real estate, multi-family mortgage, residential mortgage, secured and unsecured commercial and consumer, home equity, and construction and land loans; and mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities. In addition, it offers certificate of deposit account registry service and insured cash sweep programs; merchant credit and debit card processing, cash management, lockbox processing, online banking, and remote deposit capture services; automated teller machines, safe deposit boxes, and individual retirement accounts; and investment products and services through a third party broker dealer, as well as title insurance brokerage services. As of February 19, 2019, the company operated 39 retail branch locations serving Long Island and the greater New York metropolitan area; and 1 loan production office in Manhattan. Bridge Bancorp, Inc. was founded in 1910 and is based in Bridgehampton, New York.

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