First Mid-Illinois Bancshares (NASDAQ: FMBH) and PrivateBancorp (NASDAQ:PVTB) are both financials companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Valuation & Earnings

This table compares First Mid-Illinois Bancshares and PrivateBancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Mid-Illinois Bancshares $102.41 million 4.98 $21.84 million $2.31 17.46
PrivateBancorp N/A N/A N/A $2.65 23.01

First Mid-Illinois Bancshares has higher revenue and earnings than PrivateBancorp. First Mid-Illinois Bancshares is trading at a lower price-to-earnings ratio than PrivateBancorp, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

First Mid-Illinois Bancshares has a beta of 0.09, indicating that its stock price is 91% less volatile than the S&P 500. Comparatively, PrivateBancorp has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.

Dividends

First Mid-Illinois Bancshares pays an annual dividend of $0.68 per share and has a dividend yield of 1.7%. PrivateBancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. First Mid-Illinois Bancshares pays out 29.4% of its earnings in the form of a dividend. PrivateBancorp pays out 1.5% 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.

Institutional & Insider Ownership

20.4% of First Mid-Illinois Bancshares shares are owned by institutional investors. Comparatively, 88.5% of PrivateBancorp shares are owned by institutional investors. 20.3% of First Mid-Illinois Bancshares shares are owned by company insiders. Comparatively, 3.9% of PrivateBancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for First Mid-Illinois Bancshares and PrivateBancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Mid-Illinois Bancshares 0 2 0 0 2.00
PrivateBancorp 0 3 0 0 2.00

First Mid-Illinois Bancshares currently has a consensus target price of $37.00, suggesting a potential downside of 8.28%. PrivateBancorp has a consensus target price of $57.00, suggesting a potential downside of 6.51%. Given PrivateBancorp’s higher probable upside, analysts plainly believe PrivateBancorp is more favorable than First Mid-Illinois Bancshares.

Profitability

This table compares First Mid-Illinois Bancshares and PrivateBancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Mid-Illinois Bancshares 22.67% 9.75% 1.02%
PrivateBancorp 29.22% 11.73% 1.15%

Summary

PrivateBancorp beats First Mid-Illinois Bancshares on 8 of the 11 factors compared between the two stocks.

First Mid-Illinois Bancshares Company Profile

First Mid-Illinois Bancshares, Inc. is a financial holding company. The Company is engaged in the business of banking through its subsidiaries, First Mid-Illinois Bank & Trust, N.A. (First Mid Bank) and First Clover Leaf Bank, N.A. (First Clover Leaf Bank). The Company provides data processing services to affiliates through another subsidiary, Mid-Illinois Data Services, Inc. (MIDS). The Company offers insurance products and services to customers through its subsidiary, The Checkley Agency, Inc., doing business as First Mid Insurance Group (First Mid Insurance). The Company also owns three statutory business trusts, First Mid-Illinois Statutory Trust I (First Mid Trust I), and First Mid-Illinois Statutory Trust II (First Mid Trust II), and Clover Leaf Statutory Trust I (CLST Trust). As of December 31, 2016, the Company operated in three primary lines of business: community banking, wealth management, and insurance brokerage.

PrivateBancorp Company Profile

PrivateBancorp, Inc. is a bank holding company for The PrivateBank and Trust Company (the Bank). Through the Bank, the Company provides customized business and personal financial services to middle market companies, as well as business owners, executives, entrepreneurs and families in the markets and communities it serves. The Company operates through three operating segments: Banking, Asset Management and Holding Company activities. The Banking segment consists of commercial and personal banking services. The Company’s Asset Management segment includes certain activities of its PrivateWealth group, including investment management, personal trust and estate administration, custodial and escrow services, investment management services for 401(k) plans and brokerage services. The activities of the Holding Company Activities segment include the direct and indirect ownership of its banking subsidiary, the issuance of debt and intersegment eliminations.

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