First Financial (NASDAQ: THFFGet a rating) and Peoples Financial (OTCMKTS: PFBXGet a rating) are both small cap finance companies, but which is the better investment? We’ll compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk, and analyst recommendations.

Institutional and insider ownership

67.2% of First Financial shares are held by institutional investors. By comparison, 11.4% of Peoples Financial’s stock is held by institutional investors. 3.4% of First Financial shares are held by insiders of the company. By comparison, 28.1% of Peoples Financial’s stock is held by insiders of the company. Strong institutional ownership indicates that large fund managers, hedge funds, and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommendations for First Financial and Peoples Financial, as provided by MarketBeat.com.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
First Financial 0 0 1 0 3.00
Peoples Financial 0 0 0 0 N / A

First Financial currently has a consensus target price of $49.00, suggesting a potential upside of 10.53%. Given First Financial’s possible higher upside, research analysts clearly believe that First Financial is more favorable than Peoples Financial.

Profitability

This table compares the net margins, return on equity and return on assets of First Financial and Peoples Financial.

Net margins Return on equity return on assets
First Financial 30.36% 11.57% 1.34%
Peoples Financial 19.02% 5.79% 0.61%

Dividends

First Financial pays an annual dividend of $1.06 per share and has a dividend yield of 2.4%. Peoples Financial pays an annual dividend of $0.18 per share and has a dividend yield of 1.2%. First Financial pays 22.4% of its profits as a dividend. Peoples Financial pays 16.8% of its profits in the form of dividends. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. First Financial increased its dividend for 1 consecutive year and Peoples Financial increased its dividend for 2 consecutive years.

Valuation and benefits

This chart compares the revenue, earnings per share (EPS), and valuation of First Financial and Peoples Financial.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
First Financial $194.28 million 2.83 $52.99 million $4.73 9.37
Peoples Financial $26.76 million 2.67 $8.58 million $1.07 14.26

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

Volatility and risk

First Financial has a beta of 0.67, suggesting its stock price is 33% less volatile than the S&P 500. In comparison, Peoples Financial has a beta of 0.54, suggesting its stock price is 46% less volatile than the S&P 500.

Summary

First Financial beats Peoples Financial on 12 out of 16 factors compared between the two stocks.

Profile of the first financial company (Get a rating)

First Financial Corporation, through its subsidiaries, provides various financial services. It offers non-interest-bearing demand, interest-bearing demand, savings, term and other term deposits. The company also provides commercial loans primarily to expand a business or finance asset purchases; residential real estate and residential real estate construction loans; and home equity loans and spreads, secured loans, and secured and unsecured cash/CD loans. In addition, it offers lease financing, trust account, depositor and insurance services. The company operates 78 branches in west-central Indiana, east-central Illinois, western Kentucky, and central and western Tennessee. First Financial Corporation was founded in 1834 and is headquartered in Terre Haute, Indiana.

Peoples Financial Company Profile (Get a rating)

Peoples Financial Corporation operates as a bank holding company for The Peoples Bank which provides banking, financial and trust services to government entities, individuals and small businesses and commercial enterprises in Mississippi. It accepts various deposits, such as interest-bearing and interest-free checking accounts, savings accounts, certificates of deposit, and individual retirement accounts (IRAs). The company also offers business, commercial, real estate, construction, personal and installment loans; and personal trusts, estate agencies and services, including living and testamentary trusts, executors, guardianships and guardianships. Additionally, it provides self-directed IRAs; and managing escrow, stock transfer and bond payment agency accounts to corporate clients. In addition, the Company offers various other services including safe deposit box rental, wire transfers, night deposit facilities, collection, cash management and internet banking. As of December 31, 2021, the company operated through 17 branches located in Harrison, Hancock, Jackson and Stone counties. It also has 28 ATMs in its branches, as well as other offsite and non-proprietary locations. The company was founded in 1896 and is based in Biloxi, Mississippi.



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