WesBanco (NASDAQ: WSBC) and First Financial Bancorp. (NASDAQ:FFBC) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Dividends

WesBanco pays an annual dividend of $1.04 per share and has a dividend yield of 2.4%. First Financial Bancorp. pays an annual dividend of $0.68 per share and has a dividend yield of 2.4%. WesBanco pays out 44.4% of its earnings in the form of a dividend. First Financial Bancorp. pays out 43.0% 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.

Insider and Institutional Ownership

59.1% of WesBanco shares are owned by institutional investors. Comparatively, 77.8% of First Financial Bancorp. shares are owned by institutional investors. 4.1% of WesBanco shares are owned by insiders. Comparatively, 1.9% of First Financial Bancorp. shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for WesBanco and First Financial Bancorp., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WesBanco 0 5 2 0 2.29
First Financial Bancorp. 1 3 3 0 2.29

WesBanco presently has a consensus target price of $42.25, suggesting a potential downside of 0.82%. First Financial Bancorp. has a consensus target price of $29.00, suggesting a potential upside of 2.84%. Given First Financial Bancorp.’s higher probable upside, analysts clearly believe First Financial Bancorp. is more favorable than WesBanco.

Valuation & Earnings

This table compares WesBanco and First Financial Bancorp.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
WesBanco $367.60 million 5.10 $86.63 million $2.34 18.21
First Financial Bancorp. $375.55 million 4.66 $88.52 million $1.58 17.85

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

Risk and Volatility

WesBanco has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, First Financial Bancorp. has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

Profitability

This table compares WesBanco and First Financial Bancorp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WesBanco 24.73% 7.66% 1.07%
First Financial Bancorp. 26.49% 11.22% 1.16%

Summary

First Financial Bancorp. beats WesBanco on 11 of the 15 factors compared between the two stocks.

WesBanco Company Profile

WesBanco, Inc. (WesBanco) is a bank holding company. The Company offers a range of financial services, including retail banking, corporate banking, personal and corporate trust services, brokerage services, mortgage banking and insurance. WesBanco offers its services through two segments: community banking, which offers services, such as commercial demand, individual demand and time deposit accounts, as well as commercial, mortgage and individual installment loans, and trust and investment services, which offers trust services, as well as various alternative investment products, including mutual funds. The Community Banking segment also offers insurance and securities brokerage services, among others. As of December 31, 2016, WesBanco operated one commercial bank, WesBanco Bank, Inc. through 174 branches and 163 automated teller machines (ATMs) located in West Virginia, Ohio, western Pennsylvania, Kentucky and southern Indiana.

First Financial Bancorp. Company Profile

First Financial Bancorp. (First Financial) is a regional bank holding company. First Financial is engaged in the business of commercial banking and other banking and banking-related activities through its subsidiary, First Financial Bank, National Association (the Bank). The range of banking services provided by First Financial to individuals and businesses include commercial lending, real estate lending and consumer financing. It offers deposit products that include interest-bearing and non-interest-bearing accounts, time deposits and cash management services for commercial customers. First Financial’s Wealth Management division provides a range of trust and asset management services. As of December 31, 2016, it operated 102 banking centers. Its banking operating markets are located within the three state region of Ohio, Indiana and Kentucky. As of December 31, 2016, it operated 60 banking centers in Ohio, 38 banking centers in Indiana and four banking centers in Kentucky.

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