First Financial Bankshares (NASDAQ:FFIN) and Melrose Bancorp (NASDAQ:MELR) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.

Earnings & Valuation

This table compares First Financial Bankshares and Melrose Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Financial Bankshares $393.45 million 10.23 $150.63 million $2.18 27.21
Melrose Bancorp $11.56 million 3.91 $1.77 million N/A N/A

First Financial Bankshares has higher revenue and earnings than Melrose Bancorp.

Analyst Ratings

This is a summary of current ratings and recommmendations for First Financial Bankshares and Melrose Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Financial Bankshares 0 2 0 0 2.00
Melrose Bancorp 0 1 0 0 2.00

First Financial Bankshares presently has a consensus price target of $58.50, suggesting a potential downside of 0.68%. Given First Financial Bankshares’ higher possible upside, equities research analysts plainly believe First Financial Bankshares is more favorable than Melrose Bancorp.

Insider and Institutional Ownership

54.9% of First Financial Bankshares shares are owned by institutional investors. Comparatively, 21.9% of Melrose Bancorp shares are owned by institutional investors. 4.9% of First Financial Bankshares shares are owned by company insiders. Comparatively, 15.4% of Melrose Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

First Financial Bankshares has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Melrose Bancorp has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
First Financial Bankshares 38.29% 14.74% 1.93%
Melrose Bancorp 15.40% 3.97% 0.56%

Dividends

First Financial Bankshares pays an annual dividend of $0.84 per share and has a dividend yield of 1.4%. Melrose Bancorp pays an annual dividend of $0.34 per share and has a dividend yield of 1.8%. First Financial Bankshares pays out 38.5% of its earnings in the form of a dividend. First Financial Bankshares has raised its dividend for 8 consecutive years.

Summary

First Financial Bankshares beats Melrose Bancorp on 11 of the 14 factors compared between the two stocks.

First Financial Bankshares Company Profile

First Financial Bankshares, Inc., through its subsidiaries, provides commercial banking products and services primarily in Texas. The company accepts checking, savings, and time deposits; and offers real estate, commercial, agricultural, and consumer loans to businesses, professionals, individuals, and farm and ranch operations. It also provides automated teller machine, drive-in and night deposit, safe deposit facility, remote deposit capture, Internet banking, mobile banking, payroll card, transmitting fund, and other customary commercial banking services. In addition, the company offers personal trust services, including wealth management, administration of estates, testamentary trusts, revocable and irrevocable trusts, and agency accounts; and securities brokerage services, as well as administers retirement and employee benefit accounts, such as 401(k) profit sharing plans and IRAs. As of January 24, 2019, it had 73 locations comprising Abilene, Acton, Albany, Aledo, Alvarado, Beaumont, Boyd, Bridgeport, Brock, Burleson, Cisco, Cleburne, Clyde, Conroe, Cut and Shoot, Decatur, Eastland, El Campo, Fort Worth, Fulshear, Glen Rose, Granbury, Grapevine, Hereford, Huntsville, Keller, Kingwood, Magnolia, Mauriceville, Merkel, Midlothian, Mineral Wells, Montgomery, Moran, New Waverly, Newton, Odessa, Orange, Palacios, Port Arthur, Ranger, Rising Star, Roby, San Angelo, Southlake, Spring, Stephenville, Sweetwater, Tomball, Trent, Trophy Club, Vidor, Waxahachie, Weatherford, Willis, and Willow Park. The company also provides asset management and technology services. First Financial Bankshares, Inc. was founded in 1890 and is headquartered in Abilene, Texas.

Melrose Bancorp Company Profile

Melrose Bancorp, Inc. operates as the bank holding company for Melrose Cooperative Bank that provides various banking products and services. The company accepts various deposits, such as noninterest-bearing demand accounts, money market accounts, savings accounts, NOW accounts, and certificates of deposit. Its loan products include one- to four-family residential real estate loans, home equity loans and lines of credit, commercial real estate loans, construction loans, and consumer loans. The company also provides online and mobile banking services; and buys, sells, and holds investment securities. It serves individuals, families, and businesses through a full-service banking office in Melrose, Massachusetts. Melrose Bancorp, Inc. was founded in 1890 and is based in Melrose, Massachusetts.

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