First Guaranty Bancshares (NASDAQ:FGBI – Get Free Report) and Hilltop (NYSE:HTH – 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, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.
Institutional and Insider Ownership
39.5% of First Guaranty Bancshares shares are held by institutional investors. Comparatively, 57.1% of Hilltop shares are held by institutional investors. 49.4% of First Guaranty Bancshares shares are held by company insiders. Comparatively, 5.4% of Hilltop shares are held 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.
Profitability
This table compares First Guaranty Bancshares and Hilltop’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| First Guaranty Bancshares | 9.17% | 10.67% | 0.52% |
| Hilltop | 9.08% | 6.51% | 0.88% |
Dividends
First Guaranty Bancshares pays an annual dividend of $0.04 per share and has a dividend yield of 0.4%. Hilltop pays an annual dividend of $0.88 per share and has a dividend yield of 2.4%. First Guaranty Bancshares pays out 3.1% of its earnings in the form of a dividend. Hilltop pays out 36.7% 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. Hilltop has raised its dividend for 8 consecutive years. Hilltop is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares First Guaranty Bancshares and Hilltop”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| First Guaranty Bancshares | $221.76 million | 0.72 | -$56.02 million | $1.28 | 7.49 |
| Hilltop | $1.63 billion | 1.30 | $165.59 million | $2.40 | 15.45 |
Hilltop has higher revenue and earnings than First Guaranty Bancshares. First Guaranty Bancshares is trading at a lower price-to-earnings ratio than Hilltop, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and target prices for First Guaranty Bancshares and Hilltop, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| First Guaranty Bancshares | 1 | 1 | 0 | 0 | 1.50 |
| Hilltop | 1 | 3 | 1 | 0 | 2.00 |
Hilltop has a consensus target price of $42.00, suggesting a potential upside of 13.30%. Given Hilltop’s stronger consensus rating and higher probable upside, analysts plainly believe Hilltop is more favorable than First Guaranty Bancshares.
Risk & Volatility
First Guaranty Bancshares has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500. Comparatively, Hilltop has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.
Summary
Hilltop beats First Guaranty Bancshares on 13 of the 17 factors compared between the two stocks.
About First Guaranty Bancshares
First Guaranty Bancshares, Inc. operates as the holding company for First Guaranty Bank that provides commercial banking services in Louisiana and Texas. It offers various deposit products, including personal and business checking, savings, money market, and demand accounts, as well as time deposits to consumers, small businesses, and municipalities. The company provides loans, such as non-farm, non-residential loans secured by real estate, commercial and industrial loans, one- to four-family residential loans, multifamily loans, construction and land development loans, agricultural loans, farmland loans, and consumer and other loans to small to medium-sized businesses and professionals, and individuals. In addition, it offers a range of consumer services, including credit cards, mobile deposit capture, safe deposit boxes, official checks, online and mobile banking, automated teller machines, and online bill pay; provides additional solutions, such as merchant services, remote deposit capture, and lockbox services to business customers; and invests a portion of its assets in securities issued by the United States Government and its agencies, state and municipal obligations, corporate debt securities, mutual funds, and equity securities, as well as invests in mortgage-backed securities primarily issued or guaranteed by United States Government agencies or enterprises. First Guaranty Bancshares, Inc. was founded in 1934 and is headquartered in Hammond, Louisiana.
About Hilltop
Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.
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