Financial Comparison: NewtekOne (NASDAQ:NEWT) & Community West Bancshares (NASDAQ:CWBC)

NewtekOne (NASDAQ:NEWT) and Community West Bancshares (NASDAQ:CWBC) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NewtekOne	16.15%	19.00%	2.50%
Community West Bancshares	20.77%	10.44%	1.15%

Analyst Recommendations

This is a summary of recent ratings and price targets for NewtekOne and Community West Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewtekOne	0	2	1	1	2.75
Community West Bancshares	0	2	3	0	2.60

NewtekOne presently has a consensus price target of $15.00, indicating a potential upside of 7.14%. Community West Bancshares has a consensus price target of $28.17, indicating a potential upside of 9.39%. Given Community West Bancshares’ higher possible upside, analysts plainly believe Community West Bancshares is more favorable than NewtekOne.

Dividends

NewtekOne pays an annual dividend of $0.76 per share and has a dividend yield of 5.4%. Community West Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 1.9%. NewtekOne pays out 33.5% of its earnings in the form of a dividend. Community West Bancshares pays out 22.2% 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. NewtekOne has increased its dividend for 1 consecutive years. NewtekOne is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

NewtekOne has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, Community West Bancshares has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Earnings and Valuation

This table compares NewtekOne and Community West Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewtekOne	$383.33 million	1.05	$60.51 million	$2.27	6.17
Community West Bancshares	$196.20 million	3.56	$38.17 million	$2.16	11.92

NewtekOne has higher revenue and earnings than Community West Bancshares. NewtekOne is trading at a lower price-to-earnings ratio than Community West Bancshares, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

38.4% of NewtekOne shares are held by institutional investors. Comparatively, 33.8% of Community West Bancshares shares are held by institutional investors. 5.9% of NewtekOne shares are held by insiders. Comparatively, 9.0% of Community West Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

NewtekOne beats Community West Bancshares on 11 of the 18 factors compared between the two stocks.

About NewtekOne

NewtekOne, Inc. operates as the bank holding company for Newtek Bank, National Association that engages in the provision of various business and financial solutions under the Newtek brand name to the small- and medium-sized business market. The company accepts demand, savings, NOW, money market, and time deposits; and provides loans including SBA loans, commercial and industrial loans, and commercial real estate loans. It is also involved in the provision of electronic payment processing services comprising credit and debit card processing services, check approval services, processing equipment, and software, as well as cloud-based Point of Sale systems for a various restaurant, retail, assisted living, taxi cabs, parks, and golf course businesses. In addition, it offers wholesale brokerage insurance agency services; and payroll management, and related payment and tax reporting services to independent business owners. Further, the company provides website hosting, dedicated server hosting, cloud hosting, web design and development, internet marketing, ecommerce, data storage, backup and disaster recovery, and other related services, including consulting and implementing technology solutions for enterprise and commercial clients as well as SMBs. The company was formerly known as Newtek Business Services Corp. and changed its name to NewtekOne, Inc. in January 2023. NewtekOne, Inc. was founded in 1998 and is headquartered in Boca Raton, Florida.

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.