First Financial Bankshares (NASDAQ: FFIN) and Heritage Financial Group (NASDAQ:HBOS) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Insider & Institutional Ownership

51.4% of First Financial Bankshares shares are owned by institutional investors. 5.0% of First Financial Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares First Financial Bankshares and Heritage Financial Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Financial Bankshares $317.42 million 9.80 $104.77 million $1.67 28.11
Heritage Financial Group N/A N/A N/A $1.19 25.36

First Financial Bankshares has higher revenue and earnings than Heritage Financial Group. Heritage Financial Group 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 First Financial Bankshares and Heritage Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Financial Bankshares 33.51% 12.70% 1.60%
Heritage Financial Group 12.90% 9.62% 0.89%

Analyst Recommendations

This is a breakdown of current ratings and target prices for First Financial Bankshares and Heritage Financial Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Financial Bankshares 0 4 0 0 2.00
Heritage Financial Group 0 0 0 0 N/A

First Financial Bankshares currently has a consensus target price of $41.25, indicating a potential downside of 12.14%. Given First Financial Bankshares’ higher probable upside, equities research analysts plainly believe First Financial Bankshares is more favorable than Heritage Financial Group.

Dividends

First Financial Bankshares pays an annual dividend of $0.76 per share and has a dividend yield of 1.6%. Heritage Financial Group does not pay a dividend. First Financial Bankshares pays out 45.5% of its earnings in the form of a dividend.

Risk & Volatility

First Financial Bankshares has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Heritage Financial Group has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Summary

First Financial Bankshares beats Heritage Financial Group on 10 of the 11 factors compared between the two stocks.

About First Financial Bankshares

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.

About Heritage Financial Group

Heritage Financial Group, Inc. (Heritage) is a bank holding company. Heritage conducts commercial banking, retail banking, mortgage banking and wealth management activities through its wholly owned subsidiary, HeritageBank of the South (the Bank). As of December 31, 2014, the Bank operated in Georgia, Florida and Alabama through 36 banking locations, 21 mortgage offices, and 5 investment offices. The Bank provides credit based products, deposit accounts, corporate cash management, investment support and other services to commercial and retail clients. As of December 31, 2014, the Company had total assets of $1.7 billion. The Company offers various types of loans, including, residential real estate loans; commercial real estate loans; construction and land loans; commercial and industrial loans, and consumer and other loans.

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