Contrasting City (NASDAQ:CHCO) and First BanCorp. (NYSE:FBP)

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

Dividends

City pays an annual dividend of $3.48 per share and has a dividend yield of 2.7%. First BanCorp. pays an annual dividend of $0.80 per share and has a dividend yield of 3.2%. City pays out 38.3% of its earnings in the form of a dividend. First BanCorp. pays out 35.6% 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. City has raised its dividend for 6 consecutive years and First BanCorp. has raised its dividend for 6 consecutive years. First BanCorp. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

72.4% of City shares are held by institutional investors. Comparatively, 97.9% of First BanCorp. shares are held by institutional investors. 1.8% of City shares are held by insiders. Comparatively, 1.9% of First BanCorp. shares are held 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.

Risk and Volatility

City has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, First BanCorp. has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Profitability

This table compares City and First BanCorp.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
City	32.72%	16.58%	1.96%
First BanCorp.	28.31%	17.51%	1.76%

Valuation and Earnings

This table compares City and First BanCorp.”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
City	$398.98 million	4.53	$130.49 million	$9.08	14.12
First BanCorp.	$1.26 billion	3.12	$344.87 million	$2.25	11.26

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

Analyst Ratings

This is a summary of current recommendations for City and First BanCorp., as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
City	0	5	1	0	2.17
First BanCorp.	0	2	3	2	3.00

City currently has a consensus target price of $134.25, suggesting a potential upside of 4.70%. First BanCorp. has a consensus target price of $25.86, suggesting a potential upside of 2.10%. Given City’s higher possible upside, equities analysts plainly believe City is more favorable than First BanCorp..

Summary

First BanCorp. beats City on 11 of the 17 factors compared between the two stocks.

About City

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust, and investment management, and other financial solutions in the United States. The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; home equity lines of credit; amortized home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts, as well as owner-occupied real estate and construction, land development, and lines of credit. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government-insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.

About First BanCorp.

First BanCorp. operates as a bank holding company for FirstBank Puerto Rico that provides a range of financial products and services to consumers and commercial customers. The company operates through six segments: Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans, as well as other products, such as cash management and business management services. The Mortgage Banking segment engages in the origination, sale, and servicing of various residential mortgage loans; hedging activities; and purchase of mortgage loans from branch and mortgage bankers. The Consumer (Retail) Banking segment provides auto loans, finance leases, boat and personal loans, credit card loans, and lines of credit; and interest-bearing and non-interest-bearing checking and savings accounts, and individual retirement accounts and retail certificates of deposit (CDs), as well as insurance agency services. The Treasury and Investments segment offers funding and liquidity management services. The United States Operations segment provides checking, savings, and money market accounts, as well as retail CDs; traditional commercial and industrial, and commercial real estate loans, residential mortgages, term and construction loan, home equity loans, lines of credit, FHLB advances, and brokered CDs; and internet banking, cash management, remote deposit capture, and automated clearing house transactions services. The Virgin Islands Operations segment is involved in consumer, commercial lending, and deposit-taking activities. First BanCorp. was founded in 1948 and is headquartered in San Juan, Puerto Rico.