First Financial Bankshares (NASDAQ: FFIN) and Enterprise Financial Services Corporation (NASDAQ:EFSC) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitabiliy, dividends, analyst recommendations, valuation, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for First Financial Bankshares and Enterprise Financial Services Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Financial Bankshares 0 3 0 0 2.00
Enterprise Financial Services Corporation 0 2 1 0 2.33

First Financial Bankshares currently has a consensus target price of $40.50, indicating a potential downside of 2.99%. Enterprise Financial Services Corporation has a consensus target price of $36.75, indicating a potential downside of 11.34%. Given First Financial Bankshares’ higher possible upside, analysts plainly believe First Financial Bankshares is more favorable than Enterprise Financial Services Corporation.

Volatility and Risk

First Financial Bankshares has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500. Comparatively, Enterprise Financial Services Corporation has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Valuation & Earnings

This table compares First Financial Bankshares and Enterprise Financial Services Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Financial Bankshares $303.60 million 9.02 $105.00 million $1.60 26.09
Enterprise Financial Services Corporation $166.47 million 5.85 $57.06 million $2.43 17.06

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

Dividends

First Financial Bankshares pays an annual dividend of $0.76 per share and has a dividend yield of 1.8%. Enterprise Financial Services Corporation pays an annual dividend of $0.44 per share and has a dividend yield of 1.1%. First Financial Bankshares pays out 47.5% of its earnings in the form of a dividend. Enterprise Financial Services Corporation pays out 18.1% 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.

Profitability

This table compares First Financial Bankshares and Enterprise Financial Services Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Financial Bankshares 33.09% 12.32% 1.56%
Enterprise Financial Services Corporation 26.77% 12.15% 1.21%

Institutional & Insider Ownership

50.1% of First Financial Bankshares shares are held by institutional investors. Comparatively, 68.6% of Enterprise Financial Services Corporation shares are held by institutional investors. 5.4% of First Financial Bankshares shares are held by company insiders. Comparatively, 5.6% of Enterprise Financial Services Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

First Financial Bankshares beats Enterprise Financial Services Corporation on 10 of the 16 factors compared between the two stocks.

First Financial Bankshares Company Profile

First Financial Bankshares, Inc. is a financial holding company. The Company, through its subsidiaries, conducts commercial banking business. As of December 31, 2016, the Company’s subsidiaries included First Financial Bank, National Association, Abilene, Texas; First Technology Services, Inc., Abilene, Texas; First Financial Trust & Asset Management Company, National Association, Abilene, Texas; First Financial Investments, Inc., Abilene, Texas, and First Financial Insurance Agency, Inc., Abilene, Texas. Its banking centers are located in Central, North Central, Southeast and West Texas. Its loan portfolio consists of loans made to businesses, professionals, individuals, and farm and ranch operations located in the primary trade areas served by its subsidiary bank. Its securities available-for-sale include the United States Treasury securities, Obligations of the United States Government sponsored enterprises and agencies and Obligations of states and political subdivisions.

Enterprise Financial Services Corporation Company Profile

Enterprise Financial Services Corp is a financial holding company for a full service banking subsidiary, Enterprise Bank & Trust (the Bank). The Bank offers banking and wealth management services to individuals and business customers primarily located in the St. Louis, Kansas City and Phoenix metropolitan markets. The Company offers a range of business and personal banking services, and wealth management services. Its tax credit brokerage activities consist of the acquisition of Federal and State tax credits and the sale of these tax credits to clients. Enterprise Trust, a division of the Bank (Enterprise Trust or Trust), provides financial planning, estate planning, investment management, and trust services to businesses, individuals, institutions, retirement plans and non-profit organizations. It also offers a range of Treasury Management products and services that benefit businesses ranging from large national clients to smallest local merchants.

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