Banc of California (NYSE:BANC) and QCR (NASDAQ:QCRH) Head-To-Head Contrast

QCR (NASDAQ:QCRH) and Banc of California (NYSE:BANC) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.

Dividends

QCR pays an annual dividend of $0.60 per share and has a dividend yield of 0.6%. Banc of California pays an annual dividend of $0.48 per share and has a dividend yield of 2.8%. QCR pays out 7.1% of its earnings in the form of a dividend. Banc of California pays out -114.3% 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. Banc of California is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

70.0% of QCR shares are held by institutional investors. Comparatively, 86.9% of Banc of California shares are held by institutional investors. 3.2% of QCR shares are held by insiders. Comparatively, 2.8% of Banc of California shares are held 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.

Earnings & Valuation

This table compares QCR and Banc of California”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
QCR	$603.75 million	2.66	$127.19 million	$8.46	11.58
Banc of California	$1.82 billion	1.49	$228.97 million	($0.42)	-40.83

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for QCR and Banc of California, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
QCR	0	3	4	0	2.57
Banc of California	0	3	7	0	2.70

QCR presently has a consensus price target of $110.60, suggesting a potential upside of 12.94%. Banc of California has a consensus price target of $22.50, suggesting a potential upside of 31.20%. Given Banc of California’s stronger consensus rating and higher possible upside, analysts plainly believe Banc of California is more favorable than QCR.

Profitability

This table compares QCR and Banc of California’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
QCR	22.86%	12.87%	1.50%
Banc of California	-1.44%	7.98%	0.69%

Risk and Volatility

QCR has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, Banc of California has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Summary

Banc of California beats QCR on 9 of the 16 factors compared between the two stocks.

About QCR

QCR Holdings, Inc., a multi-bank holding company, provides commercial and consumer banking, and trust and asset management services. The company’s deposit products include noninterest-bearing demand, interest-bearing demand, time, and brokered deposits. It also provides various commercial and retail lending/leasing, and investment services to corporations, partnerships, individuals, and government agencies. The company’s loan portfolio comprises loans to small and mid-sized businesses; business loans, including lines of credit for working capital and operational purposes; term loans for the acquisition of facilities, equipment, and other purposes; commercial and residential real estate loans; and installment and other consumer loans, such as home improvement, home equity, motor vehicle, and signature loans, as well as small personal credit lines. In addition, it engages in leasing of machinery and equipment to commercial and industrial businesses under direct financing lease contracts; and issuance of trust preferred securities. QCR Holdings, Inc. was incorporated in 1993 and is headquartered in Moline, Illinois.

About Banc of California

Banc of California, Inc. operates as the bank holding company for Banc of California that provides various banking products and services in California. The company offers deposit products, such as checking, savings, money market, demand, and time deposits; certificates of deposit; retirement accounts; and safe deposit boxes. It also provides real estate loans to professional developers and real estate investors for the acquisition, construction, refinancing, renovation, and on-going operation of commercial real estate properties; commercial real estate mortgage, residential real estate mortgage, and real estate construction and land loans; commercial loans and leases, such as equipment finance, other asset-based, venture capital, secured business, warehouse, and other lending services; small business administration loans; and consumer loans comprising personal, auto, and other loans, as well as home equity and revolving lines of credit. In addition, the company offers international banking, multi-state deposit, and asset and investment management services, as well as cash and treasury management services; and online, mobile, remote deposit, and telephone banking services. It serves small and middle-market businesses, venture capital firms, non-profit organizations, business owners, entrepreneurs, professionals, and high-net worth individuals. Banc of California, Inc. was founded in 1941 and is headquartered in Los Angeles, California.