First Mid-Illinois Bancshares (NASDAQ: FMBH) and Bank of N.T. Butterfield & Son (NYSE:NTB) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.

Dividends

First Mid-Illinois Bancshares pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. Bank of N.T. Butterfield & Son pays an annual dividend of $1.28 per share and has a dividend yield of 3.3%. First Mid-Illinois Bancshares pays out 31.8% of its earnings in the form of a dividend. Bank of N.T. Butterfield & Son pays out 69.2% 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.

Insider & Institutional Ownership

21.1% of First Mid-Illinois Bancshares shares are held by institutional investors. Comparatively, 73.8% of Bank of N.T. Butterfield & Son shares are held by institutional investors. 20.3% of First Mid-Illinois Bancshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares First Mid-Illinois Bancshares and Bank of N.T. Butterfield & Son’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Mid-Illinois Bancshares $129.89 million 3.35 $26.68 million $2.14 16.05
Bank of N.T. Butterfield & Son $424.66 million 4.92 $115.94 million $1.85 20.69

Bank of N.T. Butterfield & Son has higher revenue and earnings than First Mid-Illinois Bancshares. First Mid-Illinois Bancshares is trading at a lower price-to-earnings ratio than Bank of N.T. Butterfield & Son, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and price targets for First Mid-Illinois Bancshares and Bank of N.T. Butterfield & Son, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Mid-Illinois Bancshares 0 1 0 0 2.00
Bank of N.T. Butterfield & Son 0 1 2 0 2.67

First Mid-Illinois Bancshares currently has a consensus target price of $37.00, indicating a potential upside of 7.71%. Bank of N.T. Butterfield & Son has a consensus target price of $39.33, indicating a potential upside of 2.78%. Given First Mid-Illinois Bancshares’ higher probable upside, equities research analysts clearly believe First Mid-Illinois Bancshares is more favorable than Bank of N.T. Butterfield & Son.

Profitability

This table compares First Mid-Illinois Bancshares and Bank of N.T. Butterfield & Son’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Mid-Illinois Bancshares 20.54% 9.33% 0.99%
Bank of N.T. Butterfield & Son 22.83% 19.90% 1.39%

Volatility & Risk

First Mid-Illinois Bancshares has a beta of -0.04, suggesting that its stock price is 104% less volatile than the S&P 500. Comparatively, Bank of N.T. Butterfield & Son has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500.

Summary

Bank of N.T. Butterfield & Son beats First Mid-Illinois Bancshares on 12 of the 16 factors compared between the two stocks.

First Mid-Illinois Bancshares Company Profile

First Mid-Illinois Bancshares, Inc. is a financial holding company. The Company is engaged in the business of banking through its subsidiaries, First Mid-Illinois Bank & Trust, N.A. (First Mid Bank) and First Clover Leaf Bank, N.A. (First Clover Leaf Bank). The Company provides data processing services to affiliates through another subsidiary, Mid-Illinois Data Services, Inc. (MIDS). The Company offers insurance products and services to customers through its subsidiary, The Checkley Agency, Inc., doing business as First Mid Insurance Group (First Mid Insurance). The Company also owns three statutory business trusts, First Mid-Illinois Statutory Trust I (First Mid Trust I), and First Mid-Illinois Statutory Trust II (First Mid Trust II), and Clover Leaf Statutory Trust I (CLST Trust). As of December 31, 2016, the Company operated in three primary lines of business: community banking, wealth management, and insurance brokerage.

Bank of N.T. Butterfield & Son Company Profile

The Bank of N.T. Butterfield & Son Limited (the Bank) provides banking services and wealth management services. The Bank’s geographic segments include Bermuda, the Cayman Islands and Guernsey, where its banking operations are located, and The Bahamas, Switzerland, and the United Kingdom, where it offers specialized financial services. It offers banking services, including retail and corporate banking, and wealth management, which consists of trust, private banking, and asset management. In Bermuda and Cayman Islands segments, it offers both banking and wealth management. In Guernsey, Bahamas, and Switzerland segments, it offers wealth management. In the United Kingdom segment, it offers residential property lending. The Bank provides foreign exchange services in the normal course of business in all jurisdictions. Its wealth management platform has three lines of business: trust, private banking, and asset management.

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