First Financial Corporation Indiana (NASDAQ: THFF) and W.R. Berkley Corporation (NYSE:WRB) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Dividends

First Financial Corporation Indiana pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. W.R. Berkley Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. First Financial Corporation Indiana pays out 35.7% of its earnings in the form of a dividend. W.R. Berkley Corporation pays out 11.8% 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 Corporation Indiana has raised its dividend for 7 consecutive years. First Financial Corporation Indiana is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares First Financial Corporation Indiana and W.R. Berkley Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Financial Corporation Indiana $136.87 million 4.26 $34.22 million $2.80 17.04
W.R. Berkley Corporation $7.71 billion 1.07 $1.15 billion $4.73 14.32

W.R. Berkley Corporation has higher revenue and earnings than First Financial Corporation Indiana. W.R. Berkley Corporation is trading at a lower price-to-earnings ratio than First Financial Corporation Indiana, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for First Financial Corporation Indiana and W.R. Berkley Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Financial Corporation Indiana 0 1 0 0 2.00
W.R. Berkley Corporation 0 8 1 0 2.11

First Financial Corporation Indiana presently has a consensus target price of $45.00, indicating a potential downside of 5.66%. W.R. Berkley Corporation has a consensus target price of $66.00, indicating a potential downside of 2.55%. Given W.R. Berkley Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe W.R. Berkley Corporation is more favorable than First Financial Corporation Indiana.

Insider & Institutional Ownership

54.1% of First Financial Corporation Indiana shares are held by institutional investors. Comparatively, 71.2% of W.R. Berkley Corporation shares are held by institutional investors. 3.6% of First Financial Corporation Indiana shares are held by insiders. Comparatively, 22.1% of W.R. Berkley Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares First Financial Corporation Indiana and W.R. Berkley Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Financial Corporation Indiana 23.36% 8.06% 1.15%
W.R. Berkley Corporation 7.86% 7.58% 1.66%

Risk and Volatility

First Financial Corporation Indiana has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, W.R. Berkley Corporation has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Summary

W.R. Berkley Corporation beats First Financial Corporation Indiana on 11 of the 17 factors compared between the two stocks.

About First Financial Corporation Indiana

First Financial Corporation is a financial holding company. The Company, through its subsidiaries, offers financial services, including commercial, mortgage and consumer lending, lease financing, trust account services, depositor services and insurance services. The Company’s subsidiaries include First Financial Bank, N.A. (the Bank), The Morris Plan Company of Terre Haute (Morris Plan), First Chanticleer Corporation and FFB Risk Management Co., Inc. The Bank has two investment subsidiaries, Portfolio Management Specialists A (Specialists A) and Portfolio Management Specialists B (Specialists B), which holds and manages certain assets to manage various income streams and provides opportunities for capital creation as needed. The Bank’s loan portfolio includes commercial loans, residential loans and consumer loans. Its deposits include non-interest-bearing demand deposits, interest-bearing demand deposits, savings deposits, time deposits: $100,000 or more, and other time deposits.

About W.R. Berkley Corporation

W. R. Berkley Corporation is an insurance holding company. It operates through two segments: Insurance and Reinsurance-Global. The Insurance segment consists of its commercial insurance business operations, comprising excess and surplus lines, and admitted lines, throughout the United States, as well as its insurance business operations in the United Kingdom, Continental Europe, South America, Canada, Mexico, Scandinavia, Asia and Australia. Its Insurance segment comprises business units, such as Acadia Insurance, American Mining Insurance Group, Berkley Accident and Health, Berkley Agribusiness Risk Specialists, Berkley Aviation and Berkley Canada. Reinsurance consists of its reinsurance business on a facultative and treaty basis, in the United States, the United Kingdom, Continental Europe, Australia, the Asia-Pacific region and South Africa. Its Reinsurance segment comprises business units, such as Berkley Re America, Berkley Re Asia Pacific, Berkley Re Direct and Berkley Re UK.

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