Peoples Bancorp (PEBO) & First Interstate Bancsystem (NASDAQ:FIBK) Critical Analysis

Peoples Bancorp (NASDAQ: PEBO) and First Interstate Bancsystem (NASDAQ:FIBK) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Analyst Recommendations

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This is a breakdown of recent ratings and recommmendations for Peoples Bancorp and First Interstate Bancsystem, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Peoples Bancorp 0 3 0 0 2.00
First Interstate Bancsystem 0 1 4 0 2.80

Peoples Bancorp presently has a consensus target price of $35.50, indicating a potential upside of 0.14%. First Interstate Bancsystem has a consensus target price of $45.25, indicating a potential upside of 14.41%. Given First Interstate Bancsystem’s stronger consensus rating and higher possible upside, analysts plainly believe First Interstate Bancsystem is more favorable than Peoples Bancorp.

Risk & Volatility

Peoples Bancorp has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, First Interstate Bancsystem has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Profitability

This table compares Peoples Bancorp and First Interstate Bancsystem’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Peoples Bancorp 21.47% 8.57% 1.10%
First Interstate Bancsystem 20.50% 9.10% 1.05%

Institutional & Insider Ownership

63.6% of Peoples Bancorp shares are owned by institutional investors. Comparatively, 46.1% of First Interstate Bancsystem shares are owned by institutional investors. 3.0% of Peoples Bancorp shares are owned by company insiders. Comparatively, 40.2% of First Interstate Bancsystem shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Peoples Bancorp pays an annual dividend of $1.04 per share and has a dividend yield of 2.9%. First Interstate Bancsystem pays an annual dividend of $1.12 per share and has a dividend yield of 2.8%. Peoples Bancorp pays out 49.5% of its earnings in the form of a dividend. First Interstate Bancsystem pays out 54.6% 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. Peoples Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Peoples Bancorp and First Interstate Bancsystem’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Peoples Bancorp $179.18 million 3.63 $38.47 million $2.10 16.88
First Interstate Bancsystem $519.53 million 4.30 $106.52 million $2.05 19.29

First Interstate Bancsystem has higher revenue and earnings than Peoples Bancorp. Peoples Bancorp 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.

Summary

First Interstate Bancsystem beats Peoples Bancorp on 10 of the 16 factors compared between the two stocks.

Peoples Bancorp Company Profile

Peoples Bancorp Inc. is a financial holding company. The Company operates principally through its subsidiary, Peoples Bank. Peoples Bank’s operating subsidiaries include Peoples Insurance Agency, LLC (Peoples Insurance) and two asset management companies, PBNA, L.L.C. and Peoples Tax Credit Equity, LLC. Peoples Investment Company has one subsidiary, Peoples Capital Corporation. The Company offers banking, insurance, investment and trust solutions. Its products and services include various demand deposit accounts, savings accounts, money market accounts and certificates of deposit; commercial, consumer and real estate mortgage loans (both commercial and residential) and lines of credit; debit and automated teller machine (ATM) cards; credit cards for individuals and businesses; merchant credit card transaction processing services; corporate and personal trust services; a range of life, health and property and casualty insurance products, and brokerage services.

First Interstate Bancsystem Company Profile

First Interstate BancSystem, Inc. is a financial and bank holding company. The Company, through its bank subsidiary First Interstate Bank (the Bank), delivers a range of banking products and services to individuals, businesses, municipalities and other entities. The Company also, through its subsidiary Bank of the Cascades, offers full-service community banking through 46 branches in Oregon, Idaho and Washington. The Company operates through community banking segment. Its community banking segment provides customers with commercial and consumer banking products and services in its market areas through community service activities. In addition to its primary emphasis on commercial and consumer banking services, the Company also offers trust, employee benefit, investment and insurance services through its bank subsidiary. As of December 31, 2016, it operated 80 banking offices, including detached drive-up facilities, in 46 communities located in Montana, Wyoming and South Dakota.

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