Berkshire Hathaway (NYSE: BRK.B) and First Financial (NASDAQ:THFF) are both financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Berkshire Hathaway 7.73% 5.17% 2.36%
First Financial 19.40% 8.14% 1.19%

Volatility & Risk

Berkshire Hathaway has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, First Financial has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Dividends

First Financial pays an annual dividend of $1.02 per share and has a dividend yield of 2.3%. Berkshire Hathaway does not pay a dividend. First Financial pays out 42.9% of its earnings in the form of a dividend.

Insider and Institutional Ownership

38.1% of Berkshire Hathaway shares are owned by institutional investors. Comparatively, 53.5% of First Financial shares are owned by institutional investors. 6.1% of Berkshire Hathaway shares are owned by insiders. Comparatively, 3.6% of First Financial shares are owned 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.

Earnings and Valuation

This table compares Berkshire Hathaway and First Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Berkshire Hathaway $223.60 billion 2.21 $24.07 billion $11,356.59 0.02
First Financial $150.13 million 3.58 $29.13 million $2.38 18.45

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Berkshire Hathaway and First Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Berkshire Hathaway 1 1 2 0 2.25
First Financial 0 1 0 0 2.00

Berkshire Hathaway presently has a consensus target price of $201.33, indicating a potential upside of 0.40%. First Financial has a consensus target price of $50.00, indicating a potential upside of 13.90%. Given First Financial’s higher possible upside, analysts plainly believe First Financial is more favorable than Berkshire Hathaway.

About Berkshire Hathaway

Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in various business activities. Its segments include Insurance, such as GEICO, Berkshire Hathaway Primary Group, General Re Corporation and Berkshire Hathaway Reinsurance Group; Burlington Northern Santa Fe, LLC, which is engaged in the operation of the railroad system; Berkshire Hathaway Energy, which includes regulated electric and gas utility; Manufacturing, which includes manufacturers of various products, including industrial, consumer and building products; McLane Company, which is engaged in the wholesale distribution of groceries and non-food items; Service and retailing, which includes providers of various services, including fractional aircraft ownership programs, aviation pilot training and various retailing businesses, and Finance and financial products, which includes manufactured housing and related consumer financing, transportation equipment, manufacturing and leasing, and furniture leasing.

About First Financial

First Financial Corporation is a financial holding company. The Company, through its subsidiaries, offers financial services, including commercial, mortgage and consumer lending, lease financing, trust account services, depositor services and insurance services. The Company’s subsidiaries include First Financial Bank, N.A. (the Bank), The Morris Plan Company of Terre Haute (Morris Plan), First Chanticleer Corporation and FFB Risk Management Co., Inc. The Bank has two investment subsidiaries, Portfolio Management Specialists A (Specialists A) and Portfolio Management Specialists B (Specialists B), which holds and manages certain assets to manage various income streams and provides opportunities for capital creation as needed. The Bank’s loan portfolio includes commercial loans, residential loans and consumer loans. Its deposits include non-interest-bearing demand deposits, interest-bearing demand deposits, savings deposits, time deposits: $100,000 or more, and other time deposits.

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