First Financial Corporation Indiana (NASDAQ:THFF) vs. Ames National (NASDAQ:ATLO) Critical Review

First Financial Corporation Indiana (NASDAQ:THFF) and Ames National (NASDAQ:ATLO) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, dividends, valuation, earnings, analyst recommendations and profitability.

Profitability

This table compares First Financial Corporation Indiana and Ames National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial Corporation Indiana	22.82%	12.81%	1.39%
Ames National	21.63%	10.65%	1.02%

Analyst Ratings

This is a summary of recent recommendations for First Financial Corporation Indiana and Ames National, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Corporation Indiana	0	3	0	1	2.50
Ames National	0	2	1	0	2.33

First Financial Corporation Indiana presently has a consensus target price of $70.00, suggesting a potential upside of 1.30%. Ames National has a consensus target price of $31.00, suggesting a potential upside of 8.01%. Given Ames National’s higher probable upside, analysts clearly believe Ames National is more favorable than First Financial Corporation Indiana.

Risk & Volatility

First Financial Corporation Indiana has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500. Comparatively, Ames National has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500.

Institutional and Insider Ownership

72.7% of First Financial Corporation Indiana shares are held by institutional investors. Comparatively, 26.5% of Ames National shares are held by institutional investors. 5.0% of First Financial Corporation Indiana shares are held by company insiders. Comparatively, 2.3% of Ames National shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

First Financial Corporation Indiana pays an annual dividend of $2.24 per share and has a dividend yield of 3.2%. Ames National pays an annual dividend of $0.96 per share and has a dividend yield of 3.3%. First Financial Corporation Indiana pays out 32.9% of its earnings in the form of a dividend. Ames National pays out 39.7% 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 Corporation Indiana has raised its dividend for 2 consecutive years.

Earnings and Valuation

This table compares First Financial Corporation Indiana and Ames National”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial Corporation Indiana	$347.56 million	2.36	$79.21 million	$6.80	10.16
Ames National	$98.26 million	2.59	$19.03 million	$2.42	11.86

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

Summary

First Financial Corporation Indiana beats Ames National on 13 of the 18 factors compared between the two stocks.

About First Financial Corporation Indiana

First Financial Corporation, through its subsidiaries, provides various financial services. The company offers non-interest-bearing demand, interest-bearing demand, savings, time, and other time deposits. It 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, the company offers lease financing, trust account, depositor, and insurance services. The company was founded in 1834 and is headquartered in Terre Haute, Indiana.

About Ames National

Ames National Corporation operates as a multi-bank holding company that provides banking products and services primarily in Boone, Clarke, Hancock, Marshall, Polk, Story, and Union counties in central, north central, and south-central Iowa. The company accepts various deposit products, including checking and savings accounts; and time deposits, such as money market accounts and certificates of deposit. It also provides loans, such as short-term and medium-term commercial and agricultural real estate, residential real estate loans, equipment, vehicle, and home improvement loans; consumer loans to finance consumer purchases, such as automobiles, trucks, recreational vehicles, household furnishings, boats, personal loans, and lines of credit; agricultural and business operating loans and lines of credit; and originates mortgage loans for sale into the secondary market. In addition, the company offers cash management, merchant credit card processing, safe deposit box, wire transfer, direct deposit, and automated/video teller machine access services; and automatic drafts for various accounts, as well as wealth management services. Further, it provides farm management, investment, and custodial services for individuals, businesses, and non-profit organizations; and online, mobile, and private banking services. Ames National Corporation was incorporated in 1903 and is headquartered in Ames, Iowa.