Allegiance Bancshares (NASDAQ:ABTX) and First Interstate BancSystem (NASDAQ:FIBK) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, valuation, risk and profitability.
Risk & Volatility
Allegiance Bancshares has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500. Comparatively, First Interstate BancSystem has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.
Dividends
Allegiance Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 1.2%. First Interstate BancSystem pays an annual dividend of $1.64 per share and has a dividend yield of 3.4%. Allegiance Bancshares pays out 18.7% of its earnings in the form of a dividend. First Interstate BancSystem pays out 53.4% 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. Allegiance Bancshares has raised its dividend for 1 consecutive years and First Interstate BancSystem has raised its dividend for 1 consecutive years.
Profitability
This table compares Allegiance Bancshares and First Interstate BancSystem's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Allegiance Bancshares | 17.69% | 6.00% | 0.80% |
First Interstate BancSystem | 23.85% | 8.42% | 1.07% |
Institutional & Insider Ownership
44.3% of Allegiance Bancshares shares are owned by institutional investors. Comparatively, 51.3% of First Interstate BancSystem shares are owned by institutional investors. 8.6% of Allegiance Bancshares shares are owned by company insiders. Comparatively, 22.0% of First Interstate BancSystem shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Allegiance Bancshares and First Interstate BancSystem's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Allegiance Bancshares | $246.33 million | 3.29 | $52.96 million | $2.57 | 15.44 |
First Interstate BancSystem | $703.90 million | 4.29 | $181 million | $3.07 | 15.58 |
First Interstate BancSystem has higher revenue and earnings than Allegiance Bancshares. Allegiance Bancshares is trading at a lower price-to-earnings ratio than First Interstate BancSystem, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Allegiance Bancshares and First Interstate BancSystem, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Allegiance Bancshares | 0 | 3 | 0 | 0 | 2.00 |
First Interstate BancSystem | 0 | 1 | 3 | 0 | 2.75 |
Allegiance Bancshares currently has a consensus price target of $26.50, indicating a potential downside of 33.23%. First Interstate BancSystem has a consensus price target of $40.00, indicating a potential downside of 16.37%. Given First Interstate BancSystem's stronger consensus rating and higher possible upside, analysts clearly believe First Interstate BancSystem is more favorable than Allegiance Bancshares.
Summary
First Interstate BancSystem beats Allegiance Bancshares on 13 of the 16 factors compared between the two stocks.