Contrasting Premier Financial (NASDAQ:PFC) and First Bank (NASDAQ:FRBA)

Premier Financial (NASDAQ:PFC) and First Bank (NASDAQ:FRBA) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Dividends

Premier Financial pays an annual dividend of $1.24 per share and has a dividend yield of 6.6%. First Bank pays an annual dividend of $0.24 per share and has a dividend yield of 2.1%. Premier Financial pays out 40.0% of its earnings in the form of a dividend. First Bank pays out 21.2% 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. Premier Financial has increased its dividend for 13 consecutive years. Premier Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Premier Financial and First Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Premier Financial	0	2	1	0	2.33
First Bank	0	0	1	0	3.00

Premier Financial presently has a consensus price target of $22.50, suggesting a potential upside of 20.19%. First Bank has a consensus price target of $15.00, suggesting a potential upside of 28.31%. Given First Bank’s stronger consensus rating and higher possible upside, analysts clearly believe First Bank is more favorable than Premier Financial.

Valuation & Earnings

This table compares Premier Financial and First Bank’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Premier Financial	$456.36 million	1.47	$111.29 million	$3.10	6.04
First Bank	$173.30 million	1.32	$20.90 million	$1.13	10.35

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

Insider and Institutional Ownership

66.1% of Premier Financial shares are owned by institutional investors. Comparatively, 64.9% of First Bank shares are owned by institutional investors. 2.2% of Premier Financial shares are owned by insiders. Comparatively, 13.1% of First Bank shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Premier Financial	23.67%	9.12%	1.01%
First Bank	13.63%	11.88%	1.23%

Volatility & Risk

Premier Financial has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500. Comparatively, First Bank has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Summary

Premier Financial beats First Bank on 9 of the 16 factors compared between the two stocks.

About Premier Financial

Premier Financial Corp., through its subsidiaries, provides various banking services. It offers demand, checking, money market, and savings accounts, as well as certificates of deposits and certificates of deposit account registry service; and investment products. The company also provides residential and commercial real estate, commercial, construction, home improvement and home equity, installment, and consumer loans. In addition, it invests in the U.S. treasury and federal government agency obligations, obligations of states and political subdivisions, mortgage-backed securities that are issued by federal agencies, residential collateralized mortgage obligations, and corporate bonds. Further, the company offers property and casualty, life, and group health insurance agency services; mezzanine funding services; and digital banking services, which include mobile banking, zelle, online bill pay, and online account opening, as well as the MoneyPass ATM network. It operates in Ohio, Michigan, Indiana, Pennsylvania, and West Virginia. The company was formerly known as First Defiance Financial Corp. and changed its name to Premier Financial Corp. in June 2020. Premier Financial Corp. was founded in 1920 and is headquartered in Defiance, Ohio.

About First Bank

First Bank provides various banking products and services to small to mid-sized businesses and individuals. The company accepts various deposits, including non-interest-bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts, and certificates of deposit, as well as commercial checking accounts. It also offers various loan products comprising commercial and industrial loans, which include line of credit, inventory, equipment, and short-term working capital financing; commercial real estate loans, such as owner-occupied, investor, construction and development, and multi-family loans; residential real estate loans comprising residential mortgages, first and second lien home equity loans, and revolving lines of credit; and consumer and other loans consists of auto, personal, traditional installment, and other loans. The company also provides electronic banking services, including Internet and mobile banking, electronic bill payment, and banking by phone; ATM and debit cards, and wire and ACH transfer services; remote deposit capture; and cash management services, as well as engages in the capital markets activities. It operates full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset, and Williamstown, New Jersey; Doylestown, Trevose, Warminster, and West Chester, Paoli, Malvern, Coventry, Devon, Lionville, and Glen Mills Pennsylvania; and Palm Beach, Florida. First Bank was incorporated in 2007 and is headquartered in Hamilton, New Jersey.