Critical Comparison: Popular (NASDAQ:BPOP) and Simmons First National (NASDAQ:SFNC)

Simmons First National (NASDAQ:SFNC) and Popular (NASDAQ:BPOP) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, risk, dividends, institutional ownership and profitability.

Dividends

Simmons First National pays an annual dividend of $0.85 per share and has a dividend yield of 4.3%. Popular pays an annual dividend of $3.00 per share and has a dividend yield of 2.3%. Simmons First National pays out -29.0% of its earnings in the form of a dividend. Popular pays out 26.5% 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. Simmons First National has increased its dividend for 14 consecutive years and Popular has increased its dividend for 6 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Simmons First National and Popular’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Simmons First National	-29.70%	5.84%	0.78%
Popular	17.63%	13.27%	1.04%

Institutional and Insider Ownership

27.6% of Simmons First National shares are held by institutional investors. Comparatively, 87.3% of Popular shares are held by institutional investors. 1.4% of Simmons First National shares are held by company insiders. Comparatively, 2.1% of Popular shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Simmons First National and Popular”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simmons First National	$1.46 billion	1.94	$152.69 million	($2.93)	-6.68
Popular	$2.98 billion	2.91	$614.21 million	$11.30	11.52

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

Volatility and Risk

Simmons First National has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Popular has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Simmons First National and Popular, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simmons First National	1	3	2	2	2.63
Popular	0	2	9	0	2.82

Simmons First National presently has a consensus price target of $22.33, suggesting a potential upside of 14.18%. Popular has a consensus price target of $133.78, suggesting a potential upside of 2.76%. Given Simmons First National’s higher probable upside, analysts clearly believe Simmons First National is more favorable than Popular.

Summary

Popular beats Simmons First National on 12 of the 18 factors compared between the two stocks.

About Simmons First National

Simmons First National Corporation operates as the holding company for Simmons Bank that provides banking and other financial products and services to individuals and businesses. The company offers checking, savings, and time deposits; consumer, real estate, and commercial loans; agricultural finance, equipment, and small business administration lending; trust and fiduciary services; credit cards; investment management products; treasury management; insurance products; and securities and investment services. It also provides ATM services; Internet and mobile banking platforms; overdraft facilities; and safe deposit boxes. The company was founded in 1903 and is headquartered in Pine Bluff, Arkansas.

About Popular

Popular, Inc., through its subsidiaries, provides various retail, mortgage, and commercial banking products and services in Puerto Rico, the United States, and the British Virgin Islands. The company provides savings, NOW, money market, and other interest-bearing demand accounts; non-interest bearing demand deposits; and certificates of deposit. It also offers commercial and industrial, commercial multi-family, commercial real estate, and residential mortgage loans; consumer loans, including personal loans, credit cards, automobile loans, home equity lines of credit, and other loans to individual borrowers; construction loans; and lease financing comprising automobile loans/leases. In addition, the company provides investment banking, auto and equipment leasing and financing, broker-dealer, and insurance services; debit cards; and online banking services. Popular, Inc. was founded in 1893 and is headquartered in Hato Rey, Puerto Rico.