Head-To-Head Survey: Customers Bancorp (NYSE:CUBI) & City (NASDAQ:CHCO)

Customers Bancorp (NYSE:CUBI) and City (NASDAQ:CHCO) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Profitability

This table compares Customers Bancorp and City’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Customers Bancorp	18.63%	14.12%	1.17%
City	32.72%	16.58%	1.96%

Insider & Institutional Ownership

89.3% of Customers Bancorp shares are owned by institutional investors. Comparatively, 72.4% of City shares are owned by institutional investors. 10.4% of Customers Bancorp shares are owned by insiders. Comparatively, 1.8% of City shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Customers Bancorp and City, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Customers Bancorp	0	5	6	1	2.67
City	0	5	1	0	2.17

Customers Bancorp presently has a consensus target price of $89.62, indicating a potential upside of 16.58%. City has a consensus target price of $134.25, indicating a potential upside of 1.11%. Given Customers Bancorp’s stronger consensus rating and higher possible upside, equities analysts plainly believe Customers Bancorp is more favorable than City.

Earnings & Valuation

This table compares Customers Bancorp and City”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Customers Bancorp	$1.48 billion	1.76	$224.09 million	$7.88	9.75
City	$398.98 million	4.70	$130.49 million	$9.08	14.62

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

Risk & Volatility

Customers Bancorp has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500. Comparatively, City has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500.

Summary

Customers Bancorp beats City on 9 of the 15 factors compared between the two stocks.

About Customers Bancorp

Customers Bancorp, Inc. operates as the bank holding company for Customers Bank that provides financial products and services to individual consumers, and small and middle market businesses. The company provides deposit banking products, which includes commercial and consumer checking, non-interest-bearing and interest-bearing demand, MMDA, savings, and time deposit accounts. Its lending business offers commercial and industrial, commercial real estate, and multifamily and residential mortgage loans; SBA lending and financing; specialty lending includes fund finance, real estate specialty finance, technology and venture, and healthcare and financial institutions group; commercial loans to mortgage companies, and commercial equipment financing; and fund finance, such as variable rate loans secured by collateral pools to private debt funds; and cash management services. In addition, the company provides digital banking including Banking-as-a-Service to fintech companies, payments and treasury services to businesses, and consumer loans through fintech companies and the TassatPay, a blockchain-based instant B2B payments platform which offers instant payments including over-the-counter desks, exchanges, liquidity providers, market makers, funds, and other B2B verticals. Further, it offers mobile phone and internet banking, wire transfers, electronic bill payment, lock box, remote deposit capture, courier, merchant processing, cash vault, controlled disbursements, positive pay, and cash management services, such as account reconciliation, collections, and sweep accounts. The company was incorporated in 2010 and is headquartered in West Reading, Pennsylvania.

About City

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust, and investment management, and other financial solutions in the United States. The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; home equity lines of credit; amortized home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts, as well as owner-occupied real estate and construction, land development, and lines of credit. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government-insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.