First Western Financial (NASDAQ:MYFW) and Central Pacific Financial (NYSE:CPF) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, dividends, institutional ownership, profitability and analyst recommendations.

Earnings and Valuation

This table compares First Western Financial and Central Pacific Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Western Financial $77.63 million 1.44 $8.01 million $1.16 12.16
Central Pacific Financial $258.18 million 1.70 $58.32 million $2.03 7.67

Central Pacific Financial has higher revenue and earnings than First Western Financial. Central Pacific Financial is trading at a lower price-to-earnings ratio than First Western Financial, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

43.6% of First Western Financial shares are held by institutional investors. Comparatively, 90.9% of Central Pacific Financial shares are held by institutional investors. 23.9% of First Western Financial shares are held by insiders. Comparatively, 3.7% of Central Pacific Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for First Western Financial and Central Pacific Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Western Financial 0 0 2 0 3.00
Central Pacific Financial 0 0 1 0 3.00

First Western Financial currently has a consensus target price of $18.00, suggesting a potential upside of 27.57%. Central Pacific Financial has a consensus target price of $29.00, suggesting a potential upside of 86.38%. Given Central Pacific Financial’s higher probable upside, analysts clearly believe Central Pacific Financial is more favorable than First Western Financial.

Profitability

This table compares First Western Financial and Central Pacific Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Western Financial 15.84% 12.32% 1.21%
Central Pacific Financial 18.39% 8.82% 0.76%

Risk and Volatility

First Western Financial has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Central Pacific Financial has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Summary

Central Pacific Financial beats First Western Financial on 9 of the 13 factors compared between the two stocks.

About First Western Financial

First Western Financial, Inc., a financial holding company, through its subsidiaries, provides an integrated suite of wealth management services comprising private banking, personal trust, investment management, mortgage loans, and institutional asset management services. It operates through three segments: Wealth Management, Capital Management, and Mortgage. The Wealth Management segment provides deposit, loan, insurance, and trust and investment management advisory products and services. The Capital Management offers institutional investment management services; and acts as advisor of proprietary mutual funds. The Mortgage segment engages in soliciting, originating, and selling mortgage loans into the secondary market. The company serves entrepreneurs, professionals, and high-net worth individuals and their related philanthropic and business organizations through a network of boutique private trust bank offices in Colorado, Arizona, Wyoming, and California. First Western Financial, Inc. was founded in 2002 and is headquartered in Denver, Colorado.

About Central Pacific Financial

Central Pacific Financial Corp. operates as the holding company for Central Pacific Bank that provides commercial banking products and services to businesses, professionals, and individuals in Hawaii. The company operates in three segments: Banking Operations, Treasury, and All Others. It offers various deposit products and services, including personal and business checking and savings accounts, money market accounts, and time certificates of deposit. The company's lending activities comprise commercial loans, commercial mortgages, construction loans, and leases to small and medium-sized companies, business professionals, and real estate investors and developers, as well as residential mortgages and consumer loans to local homebuyers and individuals. It also provides debit cards, Internet and mobile banking, cash management services, traveler's checks, safe deposit boxes, international banking services, night depository facilities, foreign exchange and wire transfers, trust services, retail brokerage, and wholesale funding services. In addition, the company offers wealth management products and services, including non-deposit investment products, annuities, insurance, investment management, asset custody, and general consultation and planning services. It operates 35 branches and 79 ATMs in the state of Hawaii. The company was founded in 1954 and is headquartered in Honolulu, Hawaii.

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