Financial Survey: BOK Financial (BOKF) vs. First Midwest Bancorp (FMBI)

BOK Financial (NASDAQ: FMBI) and First Midwest Bancorp (NASDAQ:FMBI) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.

Insider and Institutional Ownership

34.4% of BOK Financial shares are held by institutional investors. Comparatively, 82.8% of First Midwest Bancorp shares are held by institutional investors. 60.5% of BOK Financial shares are held by insiders. Comparatively, 1.7% of First Midwest Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for BOK Financial and First Midwest Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BOK Financial 0 6 4 0 2.40
First Midwest Bancorp 0 3 4 0 2.57

BOK Financial currently has a consensus price target of $106.72, suggesting a potential upside of 3.55%. First Midwest Bancorp has a consensus price target of $29.38, suggesting a potential upside of 11.73%. Given First Midwest Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe First Midwest Bancorp is more favorable than BOK Financial.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BOK Financial $1.67 billion 4.04 $334.64 million $5.29 19.48
First Midwest Bancorp $672.86 million 4.03 $98.38 million $1.35 19.47

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

Profitability

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

Net Margins Return on Equity Return on Assets
BOK Financial 21.91% 11.04% 1.18%
First Midwest Bancorp 15.12% 7.83% 1.02%

Volatility and Risk

BOK Financial has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, First Midwest Bancorp has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.

Dividends

BOK Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.9%. First Midwest Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 1.7%. BOK Financial pays out 37.8% of its earnings in the form of a dividend. First Midwest Bancorp pays out 32.6% 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. BOK Financial has raised its dividend for 13 consecutive years and First Midwest Bancorp has raised its dividend for 5 consecutive years. BOK Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

BOK Financial beats First Midwest Bancorp on 11 of the 16 factors compared between the two stocks.

About BOK Financial

BOK Financial Corporation operates as the financial holding company for BOKF, NA that provides various financial products and services in Oklahoma, Texas, New Mexico, Northwest Arkansas, Colorado, Arizona, and Kansas/Missouri. It operates through three segments: Commercial Banking, Consumer Banking, and Wealth Management. The Commercial Banking segment offers lending, treasury, and cash management services, as well as customer risk management products for small businesses, middle market, and larger commercial customers. This segment also operates TransFund electronic funds network. The Consumer Banking segment provides lending and deposit services to small business customers through the retail branch network; and mortgage banking services. The Wealth Management segment offers fiduciary, private banking, and investment advisory services; and brokerage and trading services, as well as underwrites state and municipal securities. The company also provides commercial loans, such as loans for working capital, facilities acquisition or expansion, purchases of equipment, and other needs of commercial customers; and service, healthcare, wholesale/retail sector, and energy sector loans. In addition, it offers commercial real estate loans for the construction of buildings or other enhancements to real estate and property held by borrowers for investment purposes; and residential mortgage, personal, and home equity loans. Further, the company provides automated teller machines, call center, and Internet and mobile banking services. As of December 31, 2017, it operated 2,223 TransFund ATM locations. BOK Financial Corporation was founded in 1910 and is headquartered in Tulsa, Oklahoma.

About First Midwest Bancorp

First Midwest Bancorp, Inc. operates as a bank holding company for First Midwest Bank that provides various banking products and services. The company accepts checking, NOW, money market, and savings accounts, as well as various types of short-term and long-term certificates of deposit. Its loan products include working capital loans and lines of credit; accounts receivable financing; inventory and equipment financing; sector-based lending, including healthcare, asset-based lending, structured finance, and syndications; agricultural loans; and mortgages, home equity lines and loans, personal loans, specialty loans, and auto loans, as well as funding for the construction, purchase, refinance, or improvement of commercial real estate properties. In addition, the company offers treasury management products and services comprising automated clearing house collection, lockbox, remote deposit capture, and financial electronic data interchange; wire transfer, account reconciliation, controlled disbursement, direct deposit, and positive pay services; information reporting services; corporate credit cards; and liquidity management, fraud prevention, and merchant services. Further, it provides fiduciary and executor, financial planning, investment advisory, employee benefit plan, and private banking services to corporate and public retirement plans, foundations and endowments, high net worth individuals, and multi-employer trust funds. Additionally, the company offers debit and automated teller machine, and credit cards; Internet and mobile, and telephone banking services; and financial education services. It serves commercial and industrial, commercial real estate, municipal, and consumer customers. The company operates 135 locations and 184 automated teller machines in metropolitan Chicago, northwest Indiana, central and western Illinois, and eastern Iowa. First Midwest Bancorp, Inc. was incorporated in 1982 and is headquartered in Itasca, Illinois.

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