Mizuho Financial Group (NYSE:MFG) and First Midwest Bancorp (NASDAQ:FMBI) 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, dividends, valuation, institutional ownership, profitability and risk.
This is a summary of current ratings and recommmendations for Mizuho Financial Group and First Midwest Bancorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Mizuho Financial Group||0||1||0||0||2.00|
|First Midwest Bancorp||0||1||3||0||2.75|
Risk and Volatility
Mizuho Financial Group has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, First Midwest Bancorp has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.
This table compares Mizuho Financial Group and First Midwest Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Mizuho Financial Group||10.68%||4.74%||0.20%|
|First Midwest Bancorp||16.97%||6.70%||0.83%|
Valuation and Earnings
This table compares Mizuho Financial Group and First Midwest Bancorp’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Mizuho Financial Group||$36.68 billion||0.94||$1.38 billion||$0.34||7.97|
|First Midwest Bancorp||$861.62 million||1.56||$199.74 million||$1.98||5.94|
Mizuho Financial Group has higher revenue and earnings than First Midwest Bancorp. First Midwest Bancorp is trading at a lower price-to-earnings ratio than Mizuho Financial Group, indicating that it is currently the more affordable of the two stocks.
Mizuho Financial Group pays an annual dividend of $0.10 per share and has a dividend yield of 3.7%. First Midwest Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 4.8%. Mizuho Financial Group pays out 29.4% of its earnings in the form of a dividend. First Midwest Bancorp pays out 28.3% 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. First Midwest Bancorp has increased its dividend for 3 consecutive years. First Midwest Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
0.4% of Mizuho Financial Group shares are held by institutional investors. Comparatively, 80.2% of First Midwest Bancorp shares are held by institutional investors. 1.1% of First Midwest Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
First Midwest Bancorp beats Mizuho Financial Group on 14 of the 17 factors compared between the two stocks.
Mizuho Financial Group Company Profile
Mizuho Financial Group, Inc., together with its subsidiaries, engages in banking, trust, securities, and other businesses related to financial services in Japan, the Americas, Europe, and Asia/Oceania. It operates through five segments: Retail & Business Banking Company, Corporate & Institutional Company, Global Corporate Company, Global Markets Company, and Asset Management Company. The company provides deposit products; syndicated, housing, and card loans; business matching services; and advisory services related to overseas expansions, and mergers and acquisitions-related services. It also offers consulting services, including asset management and asset succession; payroll services; and sells lottery tickets issued by prefectures and ordinance-designated cities. In addition, it offers financial solutions, such as bonds, mergers and acquisitions advisory, etc. for corporate customers to meet their needs in fund-raising, investment management, and financial strategies; solutions based on their capital management, business strategy, and financial strategy; solutions related to real estate; advisory services and solutions, such as advice on proposals on various investment products to financial institutions; and financial services that include funding support and public bonds underwriting. Further, the company offers sales and trading services to meet risk hedging and investment needs; investment products for individual customers; and consulting services for institutional investors. Additionally, the company provides products and services related to trust, securitization and structured finance, pension, and stock transfers; securities services; and research, private banking, and information technology-related services. As of March 31, 2018, its branch network included 465 Mizuho Bank, 60 Mizuho Trust and Banking, and 275 Mizuho Securities; and 7,200 ATMs in Japan. The company was founded in 2003 and is headquartered in Tokyo, Japan.
First Midwest Bancorp Company Profile
First Midwest Bancorp, Inc. operates as the bank holding company for First Midwest Bank that provides various banking products and services. The company accepts checking, NOW, money market, and savings accounts, as well as various types of short-term and long-term certificates of deposit. Its loan products include working capital loans; accounts receivable financing; inventory and equipment financing; sector-based lending, including healthcare, asset-based lending, structured finance, and syndications; agricultural loans; and mortgages, home equity lines and loans, personal loans, specialty loans, and consumer secured loans, as well as funding for the construction, purchase, refinance, or improvement of commercial real estate properties. In addition, the company offers treasury management products and services comprising automated clearing house collection, lockbox, remote deposit capture, and financial electronic data interchange; wire transfer, account reconciliation, controlled disbursement, direct deposit, and positive pay services; information reporting services; corporate credit cards; and liquidity management, fraud prevention, and merchant services. Further, it provides fiduciary and executor, financial planning, investment advisory, employee benefit plan, and private banking services to corporate and public retirement plans, foundations and endowments, high net worth individuals, and multi-employer trust funds. Additionally, the company offers debit and automated teller machine, and credit cards; Internet and mobile, and telephone banking services; and financial education services. It serves commercial and industrial, commercial real estate, municipal, and consumer customers. The company operates 120 locations and 177 automated teller machines in greater Chicago metropolitan area, northwest Indiana, central and western Illinois, and eastern Iowa. First Midwest Bancorp, Inc. was incorporated in 1982 and is headquartered in Chicago, Illinois.
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