First Bank (NASDAQ:FRBA – Get Free Report) and Regions Financial (NYSE:RF – Get Free Report) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.
Profitability
This table compares First Bank and Regions Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| First Bank | 17.45% | 9.57% | 1.06% |
| Regions Financial | 23.33% | 12.88% | 1.42% |
Analyst Recommendations
This is a breakdown of recent ratings and price targets for First Bank and Regions Financial, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| First Bank | 0 | 2 | 3 | 0 | 2.60 |
| Regions Financial | 4 | 10 | 6 | 0 | 2.10 |
Valuation & Earnings
This table compares First Bank and Regions Financial”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| First Bank | $149.77 million | 3.00 | $43.66 million | $1.69 | 10.61 |
| Regions Financial | $9.61 billion | 2.67 | $2.16 billion | $2.45 | 12.30 |
Regions Financial has higher revenue and earnings than First Bank. First Bank is trading at a lower price-to-earnings ratio than Regions Financial, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
First Bank has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Regions Financial has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500.
Dividends
First Bank pays an annual dividend of $0.36 per share and has a dividend yield of 2.0%. Regions Financial pays an annual dividend of $1.20 per share and has a dividend yield of 4.0%. First Bank pays out 21.3% of its earnings in the form of a dividend. Regions Financial pays out 49.0% 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. Regions Financial has raised its dividend for 12 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
64.9% of First Bank shares are owned by institutional investors. Comparatively, 79.4% of Regions Financial shares are owned by institutional investors. 13.1% of First Bank shares are owned by insiders. Comparatively, 0.3% of Regions Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Summary
Regions Financial beats First Bank on 12 of the 17 factors compared between the two stocks.
About First Bank
First Bank provides various banking products and services to small to mid-sized businesses and individuals. 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. It also offers various loan products comprising commercial and industrial loans, which include line of credit, inventory, equipment, and short-term working capital financing; 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 and other loans consists of auto, personal, traditional installment, and other loans. The company also provides electronic banking services, including Internet and mobile banking, electronic bill payment, and banking by phone; ATM and debit cards, and wire and ACH transfer services; remote deposit capture; and cash management services, as well as engages in the capital markets activities. It operates full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset, and Williamstown, New Jersey; Doylestown, Trevose, Warminster, and West Chester, Paoli, Malvern, Coventry, Devon, Lionville, and Glen Mills Pennsylvania; and Palm Beach, Florida. First Bank was incorporated in 2007 and is headquartered in Hamilton, New Jersey.
About Regions Financial
Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.
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