Financial Comparison: Columbia Banking System (NASDAQ:COLB) and Five Star Bancorp (NASDAQ:FSBC)

Columbia Banking System (NASDAQ:COLB) and Five Star Bancorp (NASDAQ:FSBC) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Risk and Volatility

Columbia Banking System has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Five Star Bancorp has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500.

Profitability

This table compares Columbia Banking System and Five Star Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Columbia Banking System	17.98%	11.31%	1.15%
Five Star Bancorp	22.14%	12.89%	1.25%

Analyst Ratings

This is a breakdown of recent ratings for Columbia Banking System and Five Star Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Banking System	0	11	3	1	2.33
Five Star Bancorp	0	1	4	0	2.80

Columbia Banking System presently has a consensus target price of $29.36, indicating a potential upside of 11.25%. Five Star Bancorp has a consensus target price of $35.00, indicating a potential upside of 4.88%. Given Columbia Banking System’s higher probable upside, research analysts clearly believe Columbia Banking System is more favorable than Five Star Bancorp.

Earnings & Valuation

This table compares Columbia Banking System and Five Star Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Banking System	$2.97 billion	1.87	$533.67 million	$2.52	10.47
Five Star Bancorp	$213.40 million	3.34	$45.67 million	$2.45	13.62

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

Insider and Institutional Ownership

92.5% of Columbia Banking System shares are owned by institutional investors. Comparatively, 46.9% of Five Star Bancorp shares are owned by institutional investors. 0.7% of Columbia Banking System shares are owned by company insiders. Comparatively, 25.6% of Five Star Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Columbia Banking System pays an annual dividend of $1.44 per share and has a dividend yield of 5.5%. Five Star Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. Columbia Banking System pays out 57.1% of its earnings in the form of a dividend. Five Star Bancorp pays out 32.7% 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. Columbia Banking System has increased its dividend for 4 consecutive years. Columbia Banking System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.

About Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.