Centerstate Bank (NASDAQ:CSFL) and First Bancorp (NASDAQ:FNLC) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Dividends

Centerstate Bank pays an annual dividend of $0.56 per share and has a dividend yield of 4.3%. First Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 6.5%. Centerstate Bank pays out 26.3% of its earnings in the form of a dividend. Centerstate Bank has raised its dividend for 4 consecutive years and First Bancorp has raised its dividend for 6 consecutive years. First Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Centerstate Bank and First Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Centerstate Bank $851.39 million 1.90 $225.40 million $2.13 6.12
First Bancorp $92.84 million 2.18 $25.52 million N/A N/A

Centerstate Bank has higher revenue and earnings than First Bancorp.

Analyst Recommendations

This is a summary of current ratings and price targets for Centerstate Bank and First Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Centerstate Bank 0 3 0 0 2.00
First Bancorp 0 0 0 0 N/A

Centerstate Bank presently has a consensus target price of $25.00, indicating a potential upside of 91.64%. Given Centerstate Bank’s higher probable upside, analysts plainly believe Centerstate Bank is more favorable than First Bancorp.

Institutional and Insider Ownership

78.0% of Centerstate Bank shares are held by institutional investors. Comparatively, 34.2% of First Bancorp shares are held by institutional investors. 2.3% of Centerstate Bank shares are held by insiders. Comparatively, 8.3% of First Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Centerstate Bank has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500. Comparatively, First Bancorp has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Centerstate Bank 23.43% 8.41% 1.38%
First Bancorp 27.13% 12.40% 1.27%

Summary

First Bancorp beats Centerstate Bank on 8 of the 14 factors compared between the two stocks.

About Centerstate Bank

CenterState Bank Corporation operates as the holding company for CenterState Bank, N.A. that provides various consumer and commercial banking services to individuals, businesses, and industries. The company accepts various deposit products, such as savings, demand, negotiable order of withdrawal, and money market deposit accounts, as well as certificates of deposit and time deposits. Its loan products include real estate loans to individuals and businesses for the purchase, improvement of, or investment in real estate; construction of single-family residential and commercial units; and development of single-family residential building lots. The company's loan products also comprise commercial loans to small-to-medium sized businesses for working capital, equipment purchases, and various other business purposes; and consumer loans consisting of loans to individuals for various consumer purposes, as well as business purpose loans. It also offers mutual funds, annuities, and other investment products. In addition, the company sells fixed income securities; and provides hedging, loan brokerage, correspondent bank deposits, safe-keeping, bond accounting, asset/liability consulting, international wires, clearing and corporate checking account, and other correspondent banking related services. As of December 31, 2018, it operated 126 full service banking offices throughout Florida, Georgia, and Alabama; 1 loan production office in Florida; and 1 loan production office in Macon, Georgia. The company was formerly known as CenterState Banks, Inc. and changed its name to CenterState Bank Corporation in September 2017. CenterState Bank Corporation was founded in 1989 and is headquartered in Winter Haven, Florida.

About First Bancorp

The First Bancorp, Inc. operates as the holding company for First National Bank that provides a range of banking products and services to individual and corporate customers. The company offers various deposit products, including demand, NOW, savings, money market, and certificates of deposit accounts. It also provides commercial loan products, such as mortgage loans to finance investments in real property comprising multi-family residential, commercial/retail, office, industrial, hotel, educational, and other specific or mixed use properties; loans to finance construction of owner- and non-owner occupied commercial real estate properties; and revolving and term loan obligations to business and corporate enterprises for the purpose of financing working capital or capital investment. In addition, the company offers municipal loans for capitalized expenditures, construction projects, or tax-anticipation notes; residential term loans that include amortizing home mortgages and construction loans, which include loans for owner-occupied residential construction; home equity loans and lines of credit; and consumer loans, which are amortizing loans to individuals collateralized by automobiles, pleasure crafts, and recreation vehicles, as well as unsecured short-term time notes. Further, it provides private banking, financial planning, investment management, and trust services to individuals, businesses, non-profit organizations, and municipalities. The First Bancorp, Inc. operates through 16 full-service banking offices in Lincoln, Knox, Hancock, Washington, and Penobscot counties in the Mid-Coast, Eastern, and Down East regions of Maine. The company was formerly known as First National Lincoln Corporation and changed its name to The First Bancorp, Inc. in April 2008. The First Bancorp, Inc. was founded in 1864 and is based in Damariscotta, Maine.

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