Contrasting First Interstate BancSystem (NASDAQ:FIBK) & Enterprise Financial Services (NASDAQ:EFSC)

Enterprise Financial Services (NASDAQ:EFSC) and First Interstate BancSystem (NASDAQ:FIBK) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Volatility and Risk

Enterprise Financial Services has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, First Interstate BancSystem has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Enterprise Financial Services and First Interstate BancSystem, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enterprise Financial Services	0	1	3	0	2.75
First Interstate BancSystem	1	4	3	0	2.25

Enterprise Financial Services presently has a consensus price target of $66.00, indicating a potential upside of 21.35%. First Interstate BancSystem has a consensus price target of $38.17, indicating a potential upside of 15.10%. Given Enterprise Financial Services’ stronger consensus rating and higher possible upside, analysts clearly believe Enterprise Financial Services is more favorable than First Interstate BancSystem.

Dividends

Enterprise Financial Services pays an annual dividend of $1.32 per share and has a dividend yield of 2.4%. First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 5.7%. Enterprise Financial Services pays out 24.9% of its earnings in the form of a dividend. First Interstate BancSystem pays out 63.7% 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. Enterprise Financial Services has raised its dividend for 11 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Enterprise Financial Services	20.15%	10.57%	1.22%
First Interstate BancSystem	21.40%	8.83%	1.10%

Insider and Institutional Ownership

72.2% of Enterprise Financial Services shares are owned by institutional investors. Comparatively, 88.7% of First Interstate BancSystem shares are owned by institutional investors. 2.3% of Enterprise Financial Services shares are owned by company insiders. Comparatively, 8.2% of First Interstate BancSystem shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Enterprise Financial Services and First Interstate BancSystem”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enterprise Financial Services	$616.38 million	3.25	$201.37 million	$5.31	10.24
First Interstate BancSystem	$1.41 billion	2.38	$302.10 million	$2.95	11.24

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

Summary

Enterprise Financial Services beats First Interstate BancSystem on 9 of the 16 factors compared between the two stocks.

About Enterprise Financial Services

Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers primarily in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico. It provides checking, savings, money market accounts, and certificates of deposit. The company also provides commercial and industrial, commercial real estate, real estate construction and development, residential real estate, small business administration, agricultural, consumer, and other loan products. In addition, it offers treasury management and international trade services; tax credit brokerage services; life insurance premium and sponsor finance; tax credit related lending; other deposit accounts, such as community associations, property management, third party escrow, and trust services; treasury management product and services; customized solutions and products; cash management; fiduciary, investment management, and financial advisory services; and customer hedging products, including international banking, card services, and tax credit businesses. Further, the company provides online, device applications, text, and voice banking; remote deposit capture; internet banking, mobile banking, cash management, positive pay services, fraud detection and prevention, automated payables, check image, and statement and document imaging; and controlled disbursements, repurchase agreements, and sweep investment accounts. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.

About First Interstate BancSystem

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides range of banking products and services in the United States. It offers various traditional depository products, including checking, savings, and time deposits; and repurchase agreements primarily for commercial and municipal depositors. The company also offers real estate loans comprising commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans comprising direct personal loans, credit card loans and lines of credit, and indirect loans; variable and fixed rate commercial loans for small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions; and agricultural loans. In addition, it provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. Further, the company offers marketing, credit review, loan servicing, credit cards issuance and servicing, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, other operational, and specialized staff support services, as well as online and mobile banking services. The company serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, governmental services, healthcare, hospitality, housing, professional services, real estate development, retail, technology, tourism, and wholesale trade. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.