Analyzing First BanCorp. (NYSE:FBP) and Cadence Bank (NYSE:CADE)

First BanCorp. (NYSE:FBP) and Cadence Bank (NYSE:CADE) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.

Institutional & Insider Ownership

97.9% of First BanCorp. shares are owned by institutional investors. Comparatively, 84.6% of Cadence Bank shares are owned by institutional investors. 2.5% of First BanCorp. shares are owned by company insiders. Comparatively, 2.6% of Cadence Bank shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

First BanCorp. pays an annual dividend of $0.64 per share and has a dividend yield of 3.1%. Cadence Bank pays an annual dividend of $1.00 per share and has a dividend yield of 2.7%. First BanCorp. pays out 35.4% of its earnings in the form of a dividend. Cadence Bank pays out 28.7% 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. Cadence Bank has raised its dividend for 13 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First BanCorp.	24.94%	19.91%	1.63%
Cadence Bank	25.99%	8.95%	0.95%

Earnings & Valuation

This table compares First BanCorp. and Cadence Bank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First BanCorp.	$1.16 billion	2.92	$302.86 million	$1.81	11.39
Cadence Bank	$2.19 billion	3.08	$542.30 million	$3.48	10.66

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

Risk & Volatility

First BanCorp. has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, Cadence Bank has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for First BanCorp. and Cadence Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First BanCorp.	0	2	3	0	2.60
Cadence Bank	0	5	6	1	2.67

First BanCorp. currently has a consensus target price of $21.40, indicating a potential upside of 3.78%. Cadence Bank has a consensus target price of $35.29, indicating a potential downside of 4.87%. Given First BanCorp.’s higher possible upside, equities research analysts plainly believe First BanCorp. is more favorable than Cadence Bank.

Summary

Cadence Bank beats First BanCorp. on 11 of the 18 factors compared between the two stocks.

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.

About Cadence Bank

Cadence Bank provides commercial banking and financial services. Its products and services include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized and asset-based lending, commercial real estate, equipment financing, and correspondent banking services. The company’s products and services also comprise small business administration lending, foreign exchange, wealth management, investment and trust, financial planning, retirement plan management, and personal and business insurance services. Cadence Bank was founded in 1876 and is headquartered in Tupelo, Mississippi.