Comparing Chesapeake Financial Shares (OTCMKTS:CPKF) and First BanCorp. (NYSE:FBP)

Chesapeake Financial Shares (OTCMKTS:CPKF) and First BanCorp. (NYSE:FBP) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Chesapeake Financial Shares and First BanCorp., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chesapeake Financial Shares	0	0	0	0	0.00
First BanCorp.	0	2	4	0	2.67

First BanCorp. has a consensus price target of $24.75, indicating a potential upside of 9.48%. Given First BanCorp.’s stronger consensus rating and higher probable upside, analysts plainly believe First BanCorp. is more favorable than Chesapeake Financial Shares.

Insider and Institutional Ownership

3.7% of Chesapeake Financial Shares shares are held by institutional investors. Comparatively, 97.9% of First BanCorp. shares are held by institutional investors. 39.5% of Chesapeake Financial Shares shares are held by company insiders. Comparatively, 2.3% of First BanCorp. shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Chesapeake Financial Shares pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. First BanCorp. pays an annual dividend of $0.80 per share and has a dividend yield of 3.5%. Chesapeake Financial Shares pays out 31.9% of its earnings in the form of a dividend. First BanCorp. pays out 37.2% 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 BanCorp. has raised its dividend for 6 consecutive years. First BanCorp. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Chesapeake Financial Shares	9.78%	14.64%	1.07%
First BanCorp.	27.48%	17.33%	1.70%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chesapeake Financial Shares	$102.27 million	1.59	$10.00 million	$2.13	16.20
First BanCorp.	$1.26 billion	2.81	$344.87 million	$2.15	10.51

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

Risk and Volatility

Chesapeake Financial Shares has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500. Comparatively, First BanCorp. has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500.

Summary

First BanCorp. beats Chesapeake Financial Shares on 14 of the 17 factors compared between the two stocks.

About Chesapeake Financial Shares

Chesapeake Financial Shares, Inc. operates as the bank holding company for Chesapeake Bank that provides various banking products and services for individuals and businesses in the United States. The company accepts interest and noninterest checking, savings, and money market accounts; and variable-rate and fixed-term money market accounts, as well as certificates of deposit. It also offers mortgage, and single-family residential and residential construction loans; commercial loans, which include owner-occupied commercial development, retail, builders/contractors, medical, service and professional, hospitality, nonprofits, marine industry, and agricultural and seafood loans; and consumer and other loans. In addition, the company provides merchant processing, accounts receivable financing, wealth management and trust, and mortgage banking services, as well as cash management services. The company was founded in 1900 and is based in Kilmarnock, 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.