Head to Head Contrast: First Bank (FRBA) versus Renasant (RNST)

First Bank (NASDAQ:FRBA) and Renasant (NASDAQ:RNST) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, profitability, valuation, dividends and risk.

Dividends

First Bank pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. Renasant pays an annual dividend of $0.84 per share and has a dividend yield of 2.4%. First Bank pays out 12.5% of its earnings in the form of a dividend. Renasant pays out 28.0% 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. Renasant has raised its dividend for 5 consecutive years. Renasant is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares First Bank and Renasant’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Bank $76.19 million 2.55 $17.59 million $0.96 11.58
Renasant $605.82 million 3.46 $146.92 million $3.00 11.89

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

Volatility & Risk

First Bank has a beta of 0.35, meaning that its stock price is 65% less volatile than the S&P 500. Comparatively, Renasant has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Insider & Institutional Ownership

50.0% of First Bank shares are owned by institutional investors. Comparatively, 59.1% of Renasant shares are owned by institutional investors. 3.4% of Renasant shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for First Bank and Renasant, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Bank 0 0 0 0 N/A
Renasant 0 3 1 0 2.25

Renasant has a consensus target price of $37.00, indicating a potential upside of 3.76%. Given Renasant’s higher probable upside, analysts plainly believe Renasant is more favorable than First Bank.

Profitability

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

Net Margins Return on Equity Return on Assets
First Bank 23.09% N/A N/A
Renasant 24.19% 9.30% 1.41%

Summary

Renasant beats First Bank on 15 of the 16 factors compared between the two stocks.

First Bank Company Profile

First Bank provides various banking products and services to individuals, businesses, and governmental entities. 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. Its loan products include commercial and industrial loans; 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 loans, which consist of auto, personal, and traditional installment loans, as well as other loans. The company also provides electronic banking services, including Internet and mobile banking, electronic bill payment, and banking by phone, as well as ATM and debit cards, and wire and ACH transfer services; and cash management services. As of December 31, 2017, it operated 14 full-service branches in Cranbury, Denville, Ewing, Flemington, Hamilton, Lawrence, Randolph, Somerset, and Williamstown, New Jersey; and Doylestown, Bensalem, Warminster, Levittown, and Trevose, Pennsylvania. First Bank was founded in 2007 and is headquartered in Hamilton, New Jersey.

Renasant Company Profile

Renasant Corporation operates as a bank holding company for Renasant Bank, which provides a range of financial, wealth management, fiduciary, and insurance services to retail and commercial customers. It operates through three segments: Community Banks, Insurance, and Wealth Management. The Community Banks segment offers checking and savings, money market, individual retirement, and health savings accounts, as well as safe deposit and night depository facilities. It also provides commercial, financial, and agricultural loans; equipment financing and leasing; real estate–1-4 family mortgage; real estate–commercial mortgage; real estate–construction loans for the construction of single family residential properties, multi-family properties, and commercial projects; installment loans to individuals; and business and personal, and interim construction loans, as well as automated teller machine (ATM), online and mobile banking, call center, and cash management services. The Insurance segment provides insurance agency services, including commercial and personal insurance products through third-party insurance carriers. The Wealth Management segment offers range of wealth management and fiduciary services, which include administration and management of trust accounts comprising personal and corporate benefit accounts, self-directed IRA's, and custodial accounts; administers qualified retirement plans, profit sharing and other employee benefit plans, personal trusts, and estates; and annuities, mutual funds, and other investment services through a third party broker-dealer. As of December 31, 2017, the company had 180 banking, insurance, and financial services offices located in Mississippi, Tennessee, Alabama, Florida, and Georgia; 136 full-service branches and 13 limited-service branches; and 136 ATMs at on-premise locations and 16 ATMs located at off-premise sites. Renasant Corporation was founded in 1904 and is based in Tupelo, Mississippi.

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