Analyzing Cullen/Frost Bankers (NYSE:CFR) and First Bancorp (NASDAQ:FNLC)

Cullen/Frost Bankers (NYSE:CFR) and First Bancorp (NASDAQ:FNLC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Volatility & Risk

Cullen/Frost Bankers has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, First Bancorp has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Profitability

This table compares Cullen/Frost Bankers and First Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cullen/Frost Bankers	20.57%	18.31%	1.22%
First Bancorp	18.41%	11.68%	0.94%

Earnings & Valuation

This table compares Cullen/Frost Bankers and First Bancorp’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cullen/Frost Bankers	$2.65 billion	2.48	$597.97 million	$8.46	12.09
First Bancorp	$143.61 million	1.90	$29.52 million	$2.48	9.88

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

Dividends

Cullen/Frost Bankers pays an annual dividend of $3.68 per share and has a dividend yield of 3.6%. First Bancorp pays an annual dividend of $1.40 per share and has a dividend yield of 5.7%. Cullen/Frost Bankers pays out 43.5% of its earnings in the form of a dividend. First Bancorp pays out 56.5% 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. Cullen/Frost Bankers has increased its dividend for 30 consecutive years and First Bancorp has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for Cullen/Frost Bankers and First Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cullen/Frost Bankers	2	9	2	0	2.00
First Bancorp	0	0	0	0	N/A

Cullen/Frost Bankers presently has a consensus price target of $117.46, indicating a potential upside of 14.81%. Given Cullen/Frost Bankers’ higher possible upside, analysts clearly believe Cullen/Frost Bankers is more favorable than First Bancorp.

Insider & Institutional Ownership

86.9% of Cullen/Frost Bankers shares are owned by institutional investors. Comparatively, 40.4% of First Bancorp shares are owned by institutional investors. 2.9% of Cullen/Frost Bankers shares are owned by insiders. Comparatively, 6.0% of First Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Cullen/Frost Bankers beats First Bancorp on 14 of the 16 factors compared between the two stocks.

About Cullen/Frost Bankers

Cullen/Frost Bankers, Inc. operates as the bank holding company for Frost Bank that provides commercial and consumer banking services in Texas. The company offers commercial banking services to corporations, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; and treasury management services, as well as originates commercial leasing services. It also provides consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, first mortgage loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. In addition, the company offers international banking services comprising deposits, loans, letters of credit, foreign collections, funds transmitting, and foreign exchange services; correspondent banking activities, including check clearing, transfer of funds, fixed income security services, and securities custody and clearance services. Further, it offers trust, investment, agency, and custodial services for individual and corporate clients; capital market services that include sales and trading, new issue underwriting, money market trading, advisory, and securities safekeeping and clearance; and support for international business activities, including foreign exchange, letters of credit, export-import financing, and other related activities. Additionally, the company offers insurance and securities brokerage services; holding of securities for investment purposes; and investment management services for mutual funds, institutions, and individuals. It serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. The company was founded in 1868 and is headquartered in San Antonio, Texas.

About First Bancorp

The First Bancorp, Inc. operates as the holding company for First National Bank that provides a range of banking products and services to individuals and businesses. It offers various deposit products, including demand, NOW, time, savings, money market, and certificates of deposit accounts. The company also provides commercial loans comprising commercial real estate owner occupied, such as mortgage loans to finance investments in real property such as retail space, offices, industrial buildings, hotels, educational facilities, and other specific or mixed use properties; commercial real estate non-owner occupied loans; commercial construction to finance construction in a mix of owner- and nonowner occupied commercial real estate properties; and commercial and industrial loans, including revolving and term loan for financing working capital and/or capital investment. In addition, it offers commercial multifamily loans; residential real estate term and residential real estate construction loans; loans to municipalities in Maine for capitalized expenditures, construction projects, or tax anticipation notes; home equity revolving and term loans; and personal lines of credit and amortizing loans for various purposes, such as autos, recreational vehicles, debt consolidation, personal expenses, or overdraft protection. Further, the company offers private banking, financial planning, investment management, and trust services to individuals, businesses, non-profit organizations and municipalities; and brokerage, annuity, and various insurance products, as well as payment processing services. It operates through full-service banking offices in Lincoln, Knox, Waldo, Penobscot, Hancock, and Washington counties in the Mid-Coast, Eastern, and Down East regions of Maine. The company was formerly known as First National Lincoln Corporation and changed its name to The First Bancorp, Inc. in April 2008. The First Bancorp, Inc. was founded in 1864 and is based in Damariscotta, Maine.