IBERIABANK Corporation (NASDAQ: IBKC) and First Financial Bankshares (NASDAQ:FFIN) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Dividends

IBERIABANK Corporation pays an annual dividend of $1.48 per share and has a dividend yield of 1.8%. First Financial Bankshares pays an annual dividend of $0.76 per share and has a dividend yield of 1.7%. IBERIABANK Corporation pays out 36.0% of its earnings in the form of a dividend. First Financial Bankshares pays out 46.9% 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. IBERIABANK Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

IBERIABANK Corporation has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500. Comparatively, First Financial Bankshares has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for IBERIABANK Corporation and First Financial Bankshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IBERIABANK Corporation 0 1 10 2 3.08
First Financial Bankshares 0 4 0 0 2.00

IBERIABANK Corporation presently has a consensus target price of $91.00, indicating a potential upside of 9.64%. First Financial Bankshares has a consensus target price of $40.50, indicating a potential downside of 10.30%. Given IBERIABANK Corporation’s stronger consensus rating and higher probable upside, equities analysts plainly believe IBERIABANK Corporation is more favorable than First Financial Bankshares.

Valuation & Earnings

This table compares IBERIABANK Corporation and First Financial Bankshares’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
IBERIABANK Corporation $861.72 million 5.17 $220.41 million $4.11 20.19
First Financial Bankshares $308.20 million 9.62 $106.38 million $1.62 27.87

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

Profitability

This table compares IBERIABANK Corporation and First Financial Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IBERIABANK Corporation 20.08% 6.86% 0.96%
First Financial Bankshares 33.03% 12.41% 1.57%

Insider & Institutional Ownership

81.1% of IBERIABANK Corporation shares are held by institutional investors. Comparatively, 50.1% of First Financial Bankshares shares are held by institutional investors. 3.2% of IBERIABANK Corporation shares are held by insiders. Comparatively, 5.0% of First Financial Bankshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

IBERIABANK Corporation beats First Financial Bankshares on 10 of the 17 factors compared between the two stocks.

IBERIABANK Corporation Company Profile

IBERIABANK Corporation is a financial holding company. The Company is a holding company for IBERIABANK, a Louisiana state chartered banking corporation; Lenders Title Company, an Arkansas-chartered title insurance and closing services agency (Lenders Title); IBERIA Capital Partners LLC (ICP), a corporate finance services firm; 1887 Leasing, LLC, a holding company for its aircraft; IBERIA Asset Management, Inc. (IAM), which provides wealth management and trust advisory services to high net worth individuals, pension funds, corporations and trusts; 840 Denning, LLC, which invests in a commercial rental property, and IBERIA CDE, LLC (CDE), which invests in purchased tax credits. IBERIABANK offers commercial and retail banking products and services. These products and services include an array of commercial, consumer, mortgage, and private banking products and services, trust advisory services, cash management, deposit and annuity products.

First Financial Bankshares Company Profile

First Financial Bankshares, Inc. is a financial holding company. The Company, through its subsidiaries, conducts commercial banking business. As of December 31, 2016, the Company’s subsidiaries included First Financial Bank, National Association, Abilene, Texas; First Technology Services, Inc., Abilene, Texas; First Financial Trust & Asset Management Company, National Association, Abilene, Texas; First Financial Investments, Inc., Abilene, Texas, and First Financial Insurance Agency, Inc., Abilene, Texas. Its banking centers are located in Central, North Central, Southeast and West Texas. Its loan portfolio consists of loans made to businesses, professionals, individuals, and farm and ranch operations located in the primary trade areas served by its subsidiary bank. Its securities available-for-sale include the United States Treasury securities, Obligations of the United States Government sponsored enterprises and agencies and Obligations of states and political subdivisions.

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