First Bank (NASDAQ: FRBA) and Hingham Institution for Savings (NASDAQ:HIFS) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Volatility & Risk

First Bank has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500. Comparatively, Hingham Institution for Savings has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Institutional & Insider Ownership

37.2% of First Bank shares are owned by institutional investors. Comparatively, 27.2% of Hingham Institution for Savings shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for First Bank and Hingham Institution for Savings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Bank 0 0 2 0 3.00
Hingham Institution for Savings 0 0 0 0 N/A

First Bank currently has a consensus target price of $14.50, indicating a potential upside of 3.57%. Given First Bank’s higher probable upside, research analysts clearly believe First Bank is more favorable than Hingham Institution for Savings.

Profitability

This table compares First Bank and Hingham Institution for Savings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Bank 13.11% N/A N/A
Hingham Institution for Savings 31.23% N/A N/A

Dividends

First Bank pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Hingham Institution for Savings pays an annual dividend of $1.36 per share and has a dividend yield of 0.7%. First Bank pays out 15.7% of its earnings in the form of a dividend. Hingham Institution for Savings pays out 11.5% 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. Hingham Institution for Savings is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares First Bank and Hingham Institution for Savings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Bank $53.31 million 4.58 $6.41 million $0.51 27.45
Hingham Institution for Savings $82.47 million 5.31 $25.76 million $11.83 17.56

Hingham Institution for Savings has higher revenue and earnings than First Bank. Hingham Institution for Savings is trading at a lower price-to-earnings ratio than First Bank, indicating that it is currently the more affordable of the two stocks.

Summary

Hingham Institution for Savings beats First Bank on 8 of the 12 factors compared between the two stocks.

About First Bank

First Bank is a commercial bank. The Company provides a range of lending, deposit and other financial products and services. It operates through Community Banking segment, which is engaged in providing a range of commercial and retail and related banking services. It offers a range of lending products to meet the needs of its customers located within its market areas, including commercial and industrial loans, commercial real estate loans (including owner-occupied, investor, and multi-family loans), residential real estate loans, and consumer and other loans. It offers a range of deposit instruments, including non-interest bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts and certificates of deposit. It operates 14 branches located in Cranbury, Denville, Ewing, Flemington, Hamilton, Lawrence, Somerset, Randolph and Williamstown, New Jersey, and Trevose, Doylestown, Warminster, Bensalem and Levittown in Bucks County.

About Hingham Institution for Savings

Hingham Institution for Savings (the Bank) is a Massachusetts-chartered savings bank (the Bank). The Bank is principally engaged in the business of residential and commercial real estate mortgage lending, funded by a retail deposit network and borrowings. The Bank provides a range of financial services to individuals and small businesses through its approximately 10 offices in Boston and southeastern Massachusetts. Its primary deposit products are savings, checking, and term certificate accounts, and its primary lending products are residential and commercial mortgage loans secured by properties in Eastern Massachusetts. The Bank offers personal checking accounts, money market and savings accounts, as well as longer term certificates of deposit for individuals, businesses, non-profits, cities and towns. The Bank’s loan portfolio includes residential real estate, commercial real estate, construction, home equity, commercial and consumer segments.

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