First Financial Bankshares (NASDAQ: FFIN) and Nicolet Bankshares (NASDAQ:NCBS) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.

Analyst Recommendations

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This is a summary of current ratings and target prices for First Financial Bankshares and Nicolet Bankshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Financial Bankshares 1 5 0 0 1.83
Nicolet Bankshares 0 2 2 0 2.50

First Financial Bankshares presently has a consensus target price of $43.50, suggesting a potential downside of 11.13%. Nicolet Bankshares has a consensus target price of $61.88, suggesting a potential upside of 8.95%. Given Nicolet Bankshares’ stronger consensus rating and higher probable upside, analysts clearly believe Nicolet Bankshares is more favorable than First Financial Bankshares.

Valuation & Earnings

This table compares First Financial Bankshares and Nicolet Bankshares’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Financial Bankshares $336.99 million 9.81 $120.37 million $1.81 27.04
Nicolet Bankshares $143.89 million 3.84 $33.15 million $3.31 17.16

First Financial Bankshares has higher revenue and earnings than Nicolet Bankshares. Nicolet Bankshares 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.

Institutional and Insider Ownership

51.6% of First Financial Bankshares shares are owned by institutional investors. Comparatively, 34.0% of Nicolet Bankshares shares are owned by institutional investors. 4.8% of First Financial Bankshares shares are owned by insiders. Comparatively, 16.4% of Nicolet Bankshares 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 Financial Bankshares has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, Nicolet Bankshares has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Dividends

First Financial Bankshares pays an annual dividend of $0.76 per share and has a dividend yield of 1.6%. Nicolet Bankshares does not pay a dividend. First Financial Bankshares pays out 42.0% of its earnings in the form of a dividend.

Profitability

This table compares First Financial Bankshares and Nicolet Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Financial Bankshares 35.72% 12.61% 1.60%
Nicolet Bankshares 23.38% 9.98% 1.25%

Summary

First Financial Bankshares beats Nicolet Bankshares 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. 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, First Financial Insurance Agency, Inc., Abilene, Texas, Commercial Bancshares, Inc., and Commercial State Bank, Kingwood, 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.

Nicolet Bankshares Company Profile

Nicolet Bankshares, Inc. is a bank holding company. The Company conducts operations through its subsidiary, Nicolet National Bank (the Bank), which is a commercial bank. The Company also owns investment advisory firms, Brookfield Investment Partners, LLC, which provides investment strategy and transactional services to select community banks, and Nicolet Advisory Services, LLC, which conducts brokerage and financial advisory services primarily to individual consumers. The Bank is a service community bank, which offers traditional banking products and services, and wealth management products and services to businesses and individuals. The Company’s principal business is banking, consisting of lending and deposit gathering, as well as ancillary banking-related products and services, to businesses and individuals of the communities it serves, and the operational support to deliver, fund and manage banking products and services.

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