Huntington Bancshares (HBAN) versus First Midwest Bancorp (FMBI) Head to Head Review

First Midwest Bancorp (NASDAQ:FMBI) and Huntington Bancshares (NASDAQ:HBAN) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, risk, dividends, earnings, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for First Midwest Bancorp and Huntington Bancshares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Midwest Bancorp 0 3 4 0 2.57
Huntington Bancshares 0 9 8 0 2.47

First Midwest Bancorp presently has a consensus target price of $29.38, indicating a potential upside of 10.35%. Huntington Bancshares has a consensus target price of $17.26, indicating a potential upside of 13.96%. Given Huntington Bancshares’ higher possible upside, analysts clearly believe Huntington Bancshares is more favorable than First Midwest Bancorp.

Institutional and Insider Ownership

82.5% of First Midwest Bancorp shares are owned by institutional investors. Comparatively, 73.8% of Huntington Bancshares shares are owned by institutional investors. 1.5% of First Midwest Bancorp shares are owned by insiders. Comparatively, 1.1% of Huntington Bancshares shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

First Midwest Bancorp has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, Huntington Bancshares has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.

Earnings and Valuation

This table compares First Midwest Bancorp and Huntington Bancshares’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Midwest Bancorp $672.86 million 4.08 $98.38 million $1.35 19.72
Huntington Bancshares $4.74 billion 3.53 $1.19 billion $0.98 15.46

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

Profitability

This table compares First Midwest Bancorp and Huntington Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Midwest Bancorp 15.12% 7.83% 1.02%
Huntington Bancshares 27.90% 12.93% 1.24%

Dividends

First Midwest Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 1.7%. Huntington Bancshares pays an annual dividend of $0.56 per share and has a dividend yield of 3.7%. First Midwest Bancorp pays out 32.6% of its earnings in the form of a dividend. Huntington Bancshares pays out 57.1% 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 Midwest Bancorp has raised its dividend for 5 consecutive years and Huntington Bancshares has raised its dividend for 5 consecutive years.

Summary

Huntington Bancshares beats First Midwest Bancorp on 9 of the 16 factors compared between the two stocks.

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.

About Huntington Bancshares

Huntington Bancshares Incorporated operates as a holding company for The Huntington National Bank that provides commercial, small business, consumer, and mortgage banking services. The company's Consumer and Business Banking segment offers financial products and services, such as checking accounts, savings accounts, money market accounts, certificates of deposit, consumer loans, and small business loans; and investments, mortgages, insurance, interest rate risk protection, and foreign exchange and treasury management services. Its Commercial Banking segment provides corporate risk management services; institutional sales, trading, and underwriting services; treasury management services; and other financing solutions, as well as lends real estate developers, REITs, and other customers. The company's Vehicle Finance segment offers financing for automobiles, light-duty trucks, recreational vehicles, and marine craft at franchised dealerships; and financing the acquisition of new and used vehicle inventory of franchised dealerships. Its Regional Banking and The Huntington Private Client Group segment provides deposits, lending, other banking, wealth management, investment and portfolio management, fiduciary administration, trust, retirement plan and trust, and institutional and mutual fund custody services. The company provides online, mobile, and telephone banking services, as well as ATM services. As of December 31, 2017, it had 10 private client group offices and 956 branches. The company was founded in 1866 and is headquartered in Columbus, Ohio.

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