Bancolombia SA (NYSE: CIB) and PacWest Bancorp (NASDAQ:PACW) are both mid-cap financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Earnings and Valuation

This table compares Bancolombia SA and PacWest Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bancolombia SA $3.63 billion 2.93 $1.07 billion $4.47 9.91
PacWest Bancorp $1.01 billion 5.44 $348.14 million $2.90 15.78

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

Insider and Institutional Ownership

15.9% of Bancolombia SA shares are held by institutional investors. Comparatively, 88.1% of PacWest Bancorp shares are held by institutional investors. 1.0% of PacWest Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Bancolombia SA has a beta of 0.32, suggesting that its stock price is 68% less volatile than the S&P 500. Comparatively, PacWest Bancorp has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500.

Dividends

Bancolombia SA pays an annual dividend of $1.23 per share and has a dividend yield of 2.8%. PacWest Bancorp pays an annual dividend of $2.00 per share and has a dividend yield of 4.4%. Bancolombia SA pays out 27.5% of its earnings in the form of a dividend. PacWest Bancorp pays out 69.0% 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.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Bancolombia SA and PacWest Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bancolombia SA 1 4 2 0 2.14
PacWest Bancorp 0 3 6 2 2.91

Bancolombia SA currently has a consensus target price of $44.33, suggesting a potential upside of 0.08%. PacWest Bancorp has a consensus target price of $55.44, suggesting a potential upside of 21.16%. Given PacWest Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe PacWest Bancorp is more favorable than Bancolombia SA.

Profitability

This table compares Bancolombia SA and PacWest Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bancolombia SA 17.37% 12.28% 1.37%
PacWest Bancorp 30.61% 7.73% 1.60%

Summary

PacWest Bancorp beats Bancolombia SA on 12 of the 17 factors compared between the two stocks.

About Bancolombia SA

Bancolombia S.A. (Bancolombia) is a financial institution engaged in providing a range of financial products and services to a diversified individual, corporate, and government customer base throughout Colombia, Latin America and the Caribbean region. The Bank operates through 10 segments: Banking Colombia, Banking Panama, Banking El Salvador, Leasing, Trust, Investment Banking, Brokerage, Off Shore and All other. It delivers its products and services through its regional network comprising Colombia’s non-Government owned banking network, El Salvador’s financial conglomerate by gross loans, Guatemala’s bank, Panama’s bank and off-shore banking subsidiaries in Panama, Cayman and Puerto Rico, as well as subsidiaries in Peru. The Bank and its subsidiaries offer Savings And Investment, Ahorro A La Mano, Financing, Mortgage Banking, Factoring, Financial and Operating Leases, Capital Markets, eTrading, Cash Management, Foreign Currency, Bancassurance, Investment Banking and Trust Services.

About PacWest Bancorp

PacWest Bancorp is a bank holding company for Pacific Western Bank (the Bank). The Company is focused on relationship-based business banking to small, middle-market and venture-backed businesses. As of December 31, 2016, the Bank offered a range of loan and deposit products and services through 77 branches located throughout the state of California, one branch located in Durham, North Carolina, and several loan production offices located in cities across the country. The Company provides commercial banking services, and deposit and treasury management services to small and middle-market businesses. It offers products and services through its CapitalSource and Square 1 Bank divisions. In addition, the Company provides investment advisory and asset management services to select clients through Square 1 Asset Management, Inc., a subsidiary of the Bank.

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