First Financial (NASDAQ:THFF) and 1st Source (NASDAQ:SRCE) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, institutional ownership, earnings, profitability and risk.
Insider and Institutional Ownership
57.7% of First Financial shares are owned by institutional investors. Comparatively, 71.2% of 1st Source shares are owned by institutional investors. 3.7% of First Financial shares are owned by company insiders. Comparatively, 20.0% of 1st Source shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Risk and Volatility
First Financial has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, 1st Source has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.
This is a summary of recent recommendations and price targets for First Financial and 1st Source, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
This table compares First Financial and 1st Source’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
First Financial pays an annual dividend of $1.02 per share and has a dividend yield of 2.5%. 1st Source pays an annual dividend of $1.08 per share and has a dividend yield of 2.3%. First Financial pays out 26.8% of its earnings in the form of a dividend. 1st Source pays out 34.2% 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 Financial has increased its dividend for 32 consecutive years and 1st Source has increased its dividend for 33 consecutive years. First Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares First Financial and 1st Source’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|First Financial||$164.43 million||3.04||$46.58 million||$3.80||10.69|
|1st Source||$354.37 million||3.43||$82.41 million||$3.16||14.99|
1st Source has higher revenue and earnings than First Financial. First Financial is trading at a lower price-to-earnings ratio than 1st Source, indicating that it is currently the more affordable of the two stocks.
1st Source beats First Financial on 9 of the 14 factors compared between the two stocks.
About First Financial
First Financial Corporation, through its subsidiaries, provides various financial services. It offers non-interest-bearing demand, interest-bearing demand, savings, time, and other time deposits. The company also provides commercial loans primarily to expand a business or finance asset purchases; residential real estate and residential real estate construction loans; and home equity loans and lines, secured loans, and cash/CD secured and unsecured loans. In addition, it offers lease financing, trust account, depositor, and insurance services. The company operates 66 branches in west-central Indiana and east-central Illinois. It also rents an office building. First Financial Corporation was founded in 1984 and is headquartered in Terre Haute, Indiana.
About 1st Source
1st Source Corporation operates as the holding company for 1st Source Bank that provides commercial and consumer banking services, trust and investment management services, and insurance to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate loans, and lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides a range of trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for new and used aircraft, automobiles and light trucks, construction equipment, and medium and heavy duty trucks; and leases construction equipment, various types of trucks, vans, automobiles, motor coaches, shuttle buses, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services; and investment advisory services to trust and investment clients. As of December 31, 2018, the company operated through 80 banking centers in 17 counties in Indiana and Michigan, and Sarasota County in Florida. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.
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