Head to Head Survey: Business First Bancshares (NASDAQ:BFST) and Wells Fargo & Company (NYSE:WFC)

Business First Bancshares (NASDAQ:BFST) and Wells Fargo & Company (NYSE:WFC) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Volatility & Risk

Business First Bancshares has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500. Comparatively, Wells Fargo & Company has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Profitability

This table compares Business First Bancshares and Wells Fargo & Company’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%
Wells Fargo & Company	17.64%	14.05%	1.04%

Analyst Ratings

This is a summary of recent recommendations for Business First Bancshares and Wells Fargo & Company, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Business First Bancshares	0	0	5	0	3.00
Wells Fargo & Company	0	8	15	2	2.76

Business First Bancshares currently has a consensus target price of $34.75, suggesting a potential upside of 10.99%. Wells Fargo & Company has a consensus target price of $98.08, suggesting a potential upside of 17.01%. Given Wells Fargo & Company’s higher probable upside, analysts clearly believe Wells Fargo & Company is more favorable than Business First Bancshares.

Earnings & Valuation

This table compares Business First Bancshares and Wells Fargo & Company”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Business First Bancshares	$344.00 million	2.96	$87.86 million	$2.82	11.10
Wells Fargo & Company	$123.53 billion	2.05	$21.34 billion	$7.09	11.82

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

Institutional & Insider Ownership

47.3% of Business First Bancshares shares are held by institutional investors. Comparatively, 75.9% of Wells Fargo & Company shares are held by institutional investors. 5.7% of Business First Bancshares shares are held by company insiders. Comparatively, 0.1% of Wells Fargo & Company shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. Wells Fargo & Company pays an annual dividend of $2.00 per share and has a dividend yield of 2.4%. Business First Bancshares pays out 21.3% of its earnings in the form of a dividend. Wells Fargo & Company pays out 28.2% 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 Wells Fargo & Company has raised its dividend for 4 consecutive years. Wells Fargo & Company is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Wells Fargo & Company beats Business First Bancshares on 13 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 Wells Fargo & Company

Wells Fargo & Co. is a diversified and community-based financial services company, which engages in the provision of banking, insurance, investments, mortgage, and consumer and commercial finance products and services. It operates through the following segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. The Consumer Banking and Lending segment offers consumer and small business banking, home lending, credit cards, auto, and personal lending. The Commercial Banking segment provides banking and credit products across industry sectors and municipalities, secured lending and lease products, and treasury management. The Corporate and Investment Banking segment is composed of corporate banking, investment banking, treasury management, commercial real estate lending and servicing, and equity and fixed income solutions, as well as sales, trading, and research capabilities. The Wealth and Investment Management segment refers to personalized wealth management, brokerage, financial planning, lending, private banking, trust, and fiduciary products and services. The company was founded by Henry Wells and William G. Fargo on March 18, 1852 and is headquartered in San Francisco, CA.