Hancock (NASDAQ: HBHC) and 1st Source (NASDAQ:SRCE) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Institutional & Insider Ownership

77.2% of Hancock shares are owned by institutional investors. Comparatively, 70.3% of 1st Source shares are owned by institutional investors. 1.2% of Hancock shares are owned by company insiders. Comparatively, 20.3% of 1st Source shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Hancock and 1st Source’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hancock $982.95 million 4.29 $149.29 million $2.49 19.90
1st Source $280.70 million 4.63 $57.78 million $2.50 20.04

Hancock has higher revenue and earnings than 1st Source. Hancock is trading at a lower price-to-earnings ratio than 1st Source, indicating that it is currently the more affordable of the two stocks.

Dividends

Hancock pays an annual dividend of $0.96 per share and has a dividend yield of 1.9%. 1st Source pays an annual dividend of $0.80 per share and has a dividend yield of 1.6%. Hancock pays out 38.6% of its earnings in the form of a dividend. 1st Source pays out 32.0% 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. 1st Source has raised its dividend for 31 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Hancock and 1st Source, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hancock 0 4 4 1 2.67
1st Source 0 2 1 0 2.33

Hancock currently has a consensus price target of $51.78, suggesting a potential upside of 4.50%. 1st Source has a consensus price target of $51.67, suggesting a potential upside of 3.15%. Given Hancock’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Hancock is more favorable than 1st Source.

Profitability

This table compares Hancock and 1st Source’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hancock 19.08% 8.27% 0.90%
1st Source 21.74% 9.43% 1.16%

Volatility & Risk

Hancock has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500. Comparatively, 1st Source has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Summary

1st Source beats Hancock on 10 of the 18 factors compared between the two stocks.

Hancock Company Profile

Hancock Holding Company is a financial services company that provides a network of service financial choices to the Gulf South region, through its bank subsidiary, Whitney Bank (the Bank), a Mississippi state bank. The Company operates through overall banking operations segment. The Bank operates under brands, such as Hancock Bank in Mississippi, Alabama and Florida, and Whitney Bank in Louisiana and Texas. The Bank operates across the Gulf South region, which consists of southern Mississippi; southern and central Alabama; southern Louisiana; the northern, central, and panhandle regions of Florida; Houston, Texas, and Nashville, Tennessee. The Bank offers a range of traditional and online community banking services to commercial, small business and retail customers, providing a range of transaction and savings deposit products, treasury management services and investment brokerage services, among others.

1st Source Company Profile

1st Source Corporation is a bank holding company. The Company, through its subsidiaries, provides a range of financial products and services. It is engaged in commercial banking. 1st Source Bank (Bank), its banking subsidiary, offers commercial and consumer banking services, trust and wealth advisory services, and insurance to individual and business clients. The Bank offers a range of consumer and commercial banking services through its lending operations, retail branches and fee based businesses. It provides commercial, small business, agricultural, and real estate loans to primarily business clients mainly located within its regional market area. It provides a range of consumer banking products and services through its banking centers and at 1stsource.com. It also offers insurance products through 1st Source Insurance offices. It also provides a range of trust, investment, agency, and custodial services for individual, corporate and not-for-profit clients.

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