Reviewing First BanCorp. (NYSE:FBP) & State Street (NYSE:STT)

First BanCorp. (NYSE:FBP) and State Street (NYSE:STT) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Dividends

First BanCorp. pays an annual dividend of $0.64 per share and has a dividend yield of 2.9%. State Street pays an annual dividend of $2.76 per share and has a dividend yield of 3.2%. First BanCorp. pays out 36.6% of its earnings in the form of a dividend. State Street pays out 51.7% 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. State Street has increased its dividend for 12 consecutive years. State Street is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares First BanCorp. and State Street’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First BanCorp.	$892.06 million	4.07	$302.86 million	$1.75	12.47
State Street	$18.37 billion	1.40	$1.94 billion	$5.34	15.97

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

Volatility & Risk

First BanCorp. has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, State Street has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First BanCorp.	25.91%	21.86%	1.68%
State Street	8.98%	11.78%	0.83%

Insider & Institutional Ownership

97.9% of First BanCorp. shares are held by institutional investors. Comparatively, 87.4% of State Street shares are held by institutional investors. 2.5% of First BanCorp. shares are held by company insiders. Comparatively, 0.3% of State Street shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First BanCorp.	0	1	3	0	2.75
State Street	2	6	5	0	2.23

First BanCorp. currently has a consensus price target of $20.60, indicating a potential downside of 5.63%. State Street has a consensus price target of $88.96, indicating a potential upside of 4.31%. Given State Street’s higher possible upside, analysts clearly believe State Street is more favorable than First BanCorp..

Summary

State Street beats First BanCorp. on 9 of the 17 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 State Street

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. The company offers investment servicing products and services, including custody, accounting, regulatory reporting, investor, and performance and analytics; middle office products, such as IBOR, transaction management, loans, cash, derivatives and collateral, record keeping, and client reporting and investment analytics; finance leasing; foreign exchange, and brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and financial data management to support institutional investors. It also engages in the provision of portfolio management and risk analytics, as well as trading and post-trade settlement services with integrated compliance and managed data. In addition, the company offers investment management strategies and products, such as core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities, and alternative investment strategies. Further, it provides services and solutions, including environmental, social, and governance investing; defined benefit and defined contribution; and global fiduciary solutions, as well as exchange-traded funds under the SPDR ETF brand. The company provides its products and services to mutual funds, collective investment funds, UCITS, hedge funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts.