Popular (NASDAQ:BPOP) and First Bank (NASDAQ:FRBA) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Valuation and Earnings

This table compares Popular and First Bank’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Popular $2.15 billion 2.39 $107.68 million $2.68 18.72
First Bank $53.31 million 3.88 $6.99 million $0.72 16.49

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

Institutional and Insider Ownership

87.6% of Popular shares are owned by institutional investors. Comparatively, 50.1% of First Bank shares are owned by institutional investors. 1.4% of Popular shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Popular pays an annual dividend of $1.00 per share and has a dividend yield of 2.0%. First Bank pays an annual dividend of $0.12 per share and has a dividend yield of 1.0%. Popular pays out 37.3% of its earnings in the form of a dividend. First Bank pays out 16.7% 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. Popular has increased its dividend for 2 consecutive years. Popular is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Popular and First Bank, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Popular 0 1 8 0 2.89
First Bank 0 0 1 0 3.00

Popular presently has a consensus price target of $53.56, indicating a potential upside of 6.76%. First Bank has a consensus price target of $15.00, indicating a potential upside of 26.37%. Given First Bank’s stronger consensus rating and higher possible upside, analysts clearly believe First Bank is more favorable than Popular.

Risk & Volatility

Popular has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500. Comparatively, First Bank has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Profitability

This table compares Popular and First Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Popular 12.21% 5.78% 0.66%
First Bank 16.95% N/A N/A

Summary

Popular beats First Bank on 12 of the 17 factors compared between the two stocks.

Popular Company Profile

Popular, Inc., through its subsidiaries, provides various retail, mortgage, and commercial banking products and services primarily to institutional and retail customers. The company accepts various deposit products. It also offers commercial and industrial loans; commercial real estate loans; residential mortgage loans; consumer loans, including personal loans, credit cards, home equity lines of credit, and other loans to individual borrowers; construction loans; and lease financing comprising automobile loans/leases. In addition, the company provides financial advisory, investment banking, investment and securities brokerage, and insurance and reinsurance services. As of December 31, 2017, it owned and occupied approximately 67 branch premises and other facilities in Puerto Rico; and 62 offices comprising 6 owned and 56 leased in New York, New Jersey, and Florida. Popular, Inc. was founded in 1893 and is headquartered in Hato Rey, Puerto Rico.

First Bank Company Profile

First Bank provides various banking products and services to individuals, businesses, and governmental entities. The company accepts various deposits, including non-interest bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts, and certificates of deposit, as well as commercial checking accounts. Its loan products include commercial and industrial loans; commercial real estate loans, such as owner-occupied, investor, construction and development, and multi-family loans; residential real estate loans comprising residential mortgages, first and second lien home equity loans, and revolving lines of credit; and consumer loans, which consist of auto, personal, and traditional installment loans, as well as other loans. The company also provides electronic banking services, including Internet and mobile banking, electronic bill payment, and banking by phone, as well as ATM and debit cards, and wire and ACH transfer services; and cash management services. As of December 31, 2017, it operated 14 full-service branches in Cranbury, Denville, Ewing, Flemington, Hamilton, Lawrence, Randolph, Somerset, and Williamstown, New Jersey; and Doylestown, Bensalem, Warminster, Levittown, and Trevose, Pennsylvania. First Bank was founded in 2007 and is headquartered in Hamilton, New Jersey.

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