Head-To-Head Analysis: Business First Bancshares (NASDAQ:BFST) and FB Financial (NYSE:FBK)

Business First Bancshares (NASDAQ:BFST) and FB Financial (NYSE:FBK) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Institutional and Insider Ownership

47.4% of Business First Bancshares shares are held by institutional investors. Comparatively, 65.4% of FB Financial shares are held by institutional investors. 5.7% of Business First Bancshares shares are held by company insiders. Comparatively, 2.0% of FB Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. FB Financial pays an annual dividend of $0.84 per share and has a dividend yield of 1.5%. Business First Bancshares pays out 21.3% of its earnings in the form of a dividend. FB Financial pays out 22.5% 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. Business First Bancshares has raised its dividend for 2 consecutive years and FB Financial has raised its dividend for 8 consecutive years. Business First Bancshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Business First Bancshares and FB Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Business First Bancshares	0	0	5	0	3.00
FB Financial	0	0	6	1	3.14

Business First Bancshares presently has a consensus price target of $34.75, suggesting a potential upside of 10.35%. FB Financial has a consensus price target of $64.67, suggesting a potential upside of 13.61%. Given FB Financial’s stronger consensus rating and higher probable upside, analysts plainly believe FB Financial is more favorable than Business First Bancshares.

Earnings and Valuation

This table compares Business First Bancshares and FB Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Business First Bancshares	$516.55 million	1.98	$87.86 million	$2.82	11.17
FB Financial	$877.84 million	3.24	$122.62 million	$3.73	15.26

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

Profitability

This table compares Business First Bancshares and FB Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Business First Bancshares	17.07%	11.03%	1.13%
FB Financial	19.00%	12.08%	1.44%

Risk and Volatility

Business First Bancshares has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, FB Financial has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.

Summary

FB Financial beats Business First Bancshares on 15 of the 18 factors compared between the two stocks.

About Business First Bancshares

Business First Bancshares, Inc. operates as the bank holding company for b1BANK that provides various banking products and services in Louisiana and Texas. It offers various deposit products and services, including checking, demand, money market, time, and savings accounts; and certificates of deposits, remote deposit capture, and direct deposit services. The company also provides commercial and industrial loans, such as working capital, term, equipment financing, asset acquisition, expansion and development, borrowing base, and other loan products, as well as commercial lines of credit, accounts receivable factoring, agricultural financing, and letters of credit; construction and development loans; commercial real estate loans; residential real estate loans comprising first and second lien 1-4 family mortgage loans, and home equity lines of credit; and consumer loans, including secured and unsecured installment, and term loans. In addition, it offers wealth management products, including mutual funds, annuities, individual retirement accounts, and other financial products, as well as other fiduciary and private banking products and services. Further, the company provides a range of other financial services comprising debit and credit cards, treasury and cash management, merchant, automated clearing house, lock-box, receivables factoring, correspondent banking, and other treasury services, as well as employee and payroll benefits solutions; and drive-through banking facilities, automated teller machines, night depository, personalized checks, electronic funds transfer, domestic and foreign wire transfer, traveler's checks, vault, loan and deposit sweep accounts, online and mobile banking, e-statements, and bank-by-mail services. Business First Bancshares, Inc. was founded in 2006 and is headquartered in Baton Rouge, Louisiana.

About FB Financial

FB Financial Corporation operates as a bank holding company for FirstBank that provides a suite of commercial and consumer banking services to businesses, professionals, and individuals. The company operates in segments, such as Banking and Mortgage. It offers checking, demand, money market, and savings accounts; deposit and lending products and services to corporate, commercial, and consumer customers; and time deposits and certificates of deposits, as well as residential mortgage loans. The company also provides owner-occupied and non-owner-occupied real estate commercial, residential real estate 1-4 family mortgage, multi-family residential, commercial and industrial, construction, land acquisition, residential lines of credit, and land development loans; and consumer and other loans, such as car, boat, and other recreational vehicle loans, as well as manufactured homes without real estate and personal lines of credit. In addition, the company offers mortgage banking services through its bank branch network and mortgage banking offices in the southeastern United States; direct-to-consumer internet delivery channel; and trust, insurance, and investment services, as well as online and mobile banking services. The company operates full-service bank branches and limited-service branches locations throughout Tennessee, Nashville, Chattanooga, Knoxville, Memphis, Jackson, Birmingham, Florence, Huntsville, Alabama, Bowling Green, and Kentucky; and mortgage offices throughout the southeastern United States. The company was formerly known as First South Bancorp, Inc. and changed its name to FB Financial Corporation in 2016. FB Financial Corporation was founded in 1906 and is headquartered in Nashville, Tennessee.