1st Source (NASDAQ:SRCE – Get Free Report) and Popular (NASDAQ:BPOP – Get Free Report) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.
Earnings and Valuation
This table compares 1st Source and Popular”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| 1st Source | $600.00 million | 3.45 | $158.28 million | $6.52 | 13.18 |
| Popular | $4.44 billion | 2.28 | $833.16 million | $14.80 | 10.74 |
Popular has higher revenue and earnings than 1st Source. Popular is trading at a lower price-to-earnings ratio than 1st Source, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
74.5% of 1st Source shares are owned by institutional investors. Comparatively, 87.3% of Popular shares are owned by institutional investors. 20.2% of 1st Source shares are owned by company insiders. Comparatively, 2.1% of Popular shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Volatility and Risk
1st Source has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, Popular has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.
Dividends
1st Source pays an annual dividend of $1.80 per share and has a dividend yield of 2.1%. Popular pays an annual dividend of $3.60 per share and has a dividend yield of 2.3%. 1st Source pays out 27.6% of its earnings in the form of a dividend. Popular pays out 24.3% 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. 1st Source has increased its dividend for 38 consecutive years and Popular has increased its dividend for 6 consecutive years. Popular is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares 1st Source and Popular’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| 1st Source | 28.09% | 12.94% | 1.87% |
| Popular | 21.37% | 15.34% | 1.26% |
Analyst Ratings
This is a breakdown of recent ratings for 1st Source and Popular, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| 1st Source | 0 | 3 | 1 | 1 | 2.60 |
| Popular | 0 | 1 | 11 | 1 | 3.00 |
1st Source currently has a consensus price target of $89.67, suggesting a potential upside of 4.37%. Popular has a consensus price target of $187.42, suggesting a potential upside of 17.95%. Given Popular’s stronger consensus rating and higher possible upside, analysts clearly believe Popular is more favorable than 1st Source.
Summary
Popular beats 1st Source on 11 of the 17 factors compared between the two stocks.
About 1st Source
1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and wealth advisory services, and insurance products to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate mortgage loans, and home equity lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for construction equipment, new and pre-owned aircraft, auto and light trucks, and medium and heavy duty trucks; and finances construction equipment, aircrafts, medium and heavy duty trucks, step vans, vocational work trucks, motor coaches, shuttle buses, funeral cars, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.
About Popular
Popular, Inc., through its subsidiaries, provides various retail, mortgage, and commercial banking products and services in Puerto Rico, the United States, and the British Virgin Islands. The company provides savings, NOW, money market, and other interest-bearing demand accounts; non-interest bearing demand deposits; and certificates of deposit. It also offers commercial and industrial, commercial multi-family, commercial real estate, and residential mortgage loans; consumer loans, including personal loans, credit cards, automobile loans, 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 investment banking, auto and equipment leasing and financing, broker-dealer, and insurance services; debit cards; and online banking services. Popular, Inc. was founded in 1893 and is headquartered in Hato Rey, Puerto Rico.
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