U.S. Bancorp (NYSE: USB) and First Financial Bancorp. (NASDAQ:FFBC) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitabiliy, dividends, analyst recommendations and institutional ownership.

Risk and Volatility

U.S. Bancorp has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, First Financial Bancorp. has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for U.S. Bancorp and First Financial Bancorp., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
U.S. Bancorp 1 9 3 0 2.15
First Financial Bancorp. 1 5 1 0 2.00

U.S. Bancorp currently has a consensus price target of $52.33, indicating a potential upside of 1.36%. First Financial Bancorp. has a consensus price target of $27.00, indicating a potential downside of 2.00%. Given U.S. Bancorp’s stronger consensus rating and higher possible upside, research analysts plainly believe U.S. Bancorp is more favorable than First Financial Bancorp..

Profitability

This table compares U.S. Bancorp and First Financial Bancorp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
U.S. Bancorp 25.86% 13.99% 1.34%
First Financial Bancorp. 24.42% 10.79% 1.11%

Dividends

U.S. Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.2%. First Financial Bancorp. pays an annual dividend of $0.68 per share and has a dividend yield of 2.5%. U.S. Bancorp pays out 33.8% of its earnings in the form of a dividend. First Financial Bancorp. pays out 45.3% 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. First Financial Bancorp. has raised its dividend for 6 consecutive years. First Financial Bancorp. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares U.S. Bancorp and First Financial Bancorp.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
U.S. Bancorp $19.64 billion 4.43 $5.58 billion $3.31 15.60
First Financial Bancorp. $337.65 million 5.07 $93.20 million $1.50 18.37

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

Insider and Institutional Ownership

75.5% of U.S. Bancorp shares are held by institutional investors. Comparatively, 74.5% of First Financial Bancorp. shares are held by institutional investors. 0.4% of U.S. Bancorp shares are held by company insiders. Comparatively, 1.9% of First Financial Bancorp. shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

U.S. Bancorp beats First Financial Bancorp. on 11 of the 17 factors compared between the two stocks.

About U.S. Bancorp

U.S. Bancorp is a multi-state financial services holding company. The Company provides a full range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. It also engages in credit card services, merchant and automated teller machine (ATM) processing, mortgage banking, insurance, brokerage and leasing. The Company’s banking subsidiary, U.S. Bank National Association, is engaged in the general banking business, principally in domestic markets. U.S. Bank National Association provides a range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions. As of December 31, 2016, the Company’s loan portfolio was $273.2 billion. As of December 31, 2016, its investment securities amounted to $109.3 billion. As of December 31, 2016, the Company’s deposits amounted to $334,590 billion.

About First Financial Bancorp.

First Financial Bancorp. (First Financial) is a regional bank holding company. First Financial is engaged in the business of commercial banking and other banking and banking-related activities through its subsidiary, First Financial Bank, National Association (the Bank). The range of banking services provided by First Financial to individuals and businesses include commercial lending, real estate lending and consumer financing. It offers deposit products that include interest-bearing and non-interest-bearing accounts, time deposits and cash management services for commercial customers. First Financial’s Wealth Management division provides a range of trust and asset management services. As of December 31, 2016, it operated 102 banking centers. Its banking operating markets are located within the three state region of Ohio, Indiana and Kentucky. As of December 31, 2016, it operated 60 banking centers in Ohio, 38 banking centers in Indiana and four banking centers in Kentucky.

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