First Financial Bancorp. (NASDAQ:FFBC – Get Free Report) and Ames National (NASDAQ:ATLO – Get Free Report) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, profitability, analyst recommendations and valuation.
Dividends
First Financial Bancorp. pays an annual dividend of $1.04 per share and has a dividend yield of 3.2%. Ames National pays an annual dividend of $0.96 per share and has a dividend yield of 2.8%. First Financial Bancorp. pays out 36.5% of its earnings in the form of a dividend. Ames National pays out 33.4% 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. First Financial Bancorp. has raised its dividend for 1 consecutive years. First Financial Bancorp. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares First Financial Bancorp. and Ames National”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| First Financial Bancorp. | $1.04 billion | 3.33 | $255.60 million | $2.85 | 11.55 |
| Ames National | $98.26 million | 3.08 | $19.03 million | $2.87 | 11.89 |
First Financial Bancorp. has higher revenue and earnings than Ames National. First Financial Bancorp. is trading at a lower price-to-earnings ratio than Ames National, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
77.2% of First Financial Bancorp. shares are held by institutional investors. Comparatively, 26.5% of Ames National shares are held by institutional investors. 1.1% of First Financial Bancorp. shares are held by insiders. Comparatively, 2.3% of Ames National shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of recent ratings for First Financial Bancorp. and Ames National, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| First Financial Bancorp. | 0 | 2 | 5 | 0 | 2.71 |
| Ames National | 0 | 1 | 1 | 1 | 3.00 |
First Financial Bancorp. presently has a consensus price target of $34.33, indicating a potential upside of 4.31%. Ames National has a consensus price target of $31.00, indicating a potential downside of 9.14%. Given First Financial Bancorp.’s higher possible upside, equities analysts clearly believe First Financial Bancorp. is more favorable than Ames National.
Risk & Volatility
First Financial Bancorp. has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Ames National has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500.
Profitability
This table compares First Financial Bancorp. and Ames National’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| First Financial Bancorp. | 20.80% | 11.44% | 1.49% |
| Ames National | 24.44% | 12.15% | 1.19% |
Summary
First Financial Bancorp. beats Ames National on 10 of the 18 factors compared between the two stocks.
About First Financial Bancorp.
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First Financial Bancorp. is a Cincinnati-based bank holding company and the parent of First Financial Bank. Its banking roots date to 1863, when the institution that became First Financial Bank was established in Hamilton, Ohio. Through First Financial Bank, the company provides commercial and consumer banking services, including business lending, deposit accounts, residential and personal lending, treasury management, and wealth management. It serves individuals, businesses, and organizations across Ohio, Indiana, Kentucky, and Illinois.
About Ames National
Ames National Corporation (NASDAQ: ATLO) is a bank holding company headquartered in Ames, Iowa. Through its community banking subsidiaries, the company serves individuals, families, farmers, small businesses and other organizations primarily in central Iowa. The company’s banking operations provide deposit accounts, consumer and commercial loans, agricultural lending, residential mortgage financing and other traditional banking services. Its subsidiaries also offer trust and investment services, wealth management and insurance-related products to meet the financial needs of customers and businesses.
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