Critical Contrast: International Bancshares (NASDAQ:IBOC) versus BOK Financial (NASDAQ:BOKF)

BOK Financial (NASDAQ:BOKF) and International Bancshares (NASDAQ:IBOC) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Profitability

This table compares BOK Financial and International Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BOK Financial	15.98%	9.24%	1.07%
International Bancshares	40.10%	14.20%	2.59%

Risk and Volatility

BOK Financial has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, International Bancshares has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500.

Dividends

BOK Financial pays an annual dividend of $2.52 per share and has a dividend yield of 2.0%. International Bancshares pays an annual dividend of $1.40 per share and has a dividend yield of 2.0%. BOK Financial pays out 30.0% of its earnings in the form of a dividend. International Bancshares pays out 20.7% 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. BOK Financial has raised its dividend for 20 consecutive years and International Bancshares has raised its dividend for 16 consecutive years. International Bancshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

34.4% of BOK Financial shares are held by institutional investors. Comparatively, 65.9% of International Bancshares shares are held by institutional investors. 56.9% of BOK Financial shares are held by insiders. Comparatively, 13.4% of International Bancshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares BOK Financial and International Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BOK Financial	$3.48 billion	2.32	$523.57 million	$8.39	15.22
International Bancshares	$1.04 billion	4.21	$409.17 million	$6.76	10.46

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

Analyst Recommendations

This is a breakdown of current recommendations for BOK Financial and International Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BOK Financial	0	7	3	0	2.30
International Bancshares	0	0	1	0	3.00

BOK Financial presently has a consensus price target of $117.91, suggesting a potential downside of 7.66%. International Bancshares has a consensus price target of $85.00, suggesting a potential upside of 20.24%. Given International Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe International Bancshares is more favorable than BOK Financial.

Summary

International Bancshares beats BOK Financial on 9 of the 17 factors compared between the two stocks.

About BOK Financial

BOK Financial Corporation operates as the financial holding company for BOKF, NA that provides various financial products and services in Oklahoma, Texas, New Mexico, Northwest Arkansas, Colorado, Arizona, and Kansas/Missouri. It operates through three segments: Commercial Banking, Consumer Banking, and Wealth Management. The Commercial Banking segment offers lending, treasury, cash management, and customer commodity risk management products for small businesses, middle market, and larger commercial customers, as well as operates TransFund electronic funds transfer network. The Consumer Banking segment engages in the provision of retail lending and deposit services to small business customers through retail branch network; and mortgage loan origination and servicing activities. The Wealth Management segment offers fiduciary, private bank, insurance, and investment advisory services; and brokerage and trading services primarily related to providing liquidity to the mortgage markets through trading of U.S. government agency mortgage-backed securities and related derivative contracts, as well as underwrites state and municipal securities. The company also provides commercial loans, such as loans for working capital, facilities acquisition or expansion, purchases of equipment, and other needs of commercial customers; and service, healthcare, manufacturing, wholesale/retail, energy, and other sector loans. In addition, it offers commercial real estate loans for the construction of buildings or other improvements to real estate and property held by borrowers for investment purposes; residential mortgage and personal loans; and automated teller machine, call center, and Internet and mobile banking services. The company was founded in 1910 and is headquartered in Tulsa, Oklahoma.

About International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services in Texas and the State of Oklahoma. It accepts checking and saving deposits; and offers commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The company also provides international banking services, including letters of credit, commercial and industrial loans, and foreign exchange services. In addition, it offers other banking related services, such as credit cards, safety deposit boxes, collection, notary public, escrow, drive up and walk up facilities, and other customary banking services; and Internet banking services, as well as securities products through third party providers. The company was founded in 1966 and is headquartered in Laredo, Texas.