Head-To-Head Contrast: Berkshire Hills Bancorp (BHLB) and First Bank (NASDAQ:FRBA)

First Bank (NASDAQ: FRBA) and Berkshire Hills Bancorp (NYSE:BHLB) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, profitability, valuation, dividends and risk.

Earnings and Valuation

This table compares First Bank and Berkshire Hills Bancorp’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
First Bank	$31.35 million	6.06	$9.61 million	$0.64	19.77
Berkshire Hills Bancorp	$336.88 million	4.08	$72.74 million	$1.82	18.87

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for First Bank and Berkshire Hills Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Bank	0	0	1	0	3.00
Berkshire Hills Bancorp	0	3	2	0	2.40

First Bank currently has a consensus target price of $14.00, indicating a potential upside of 10.67%. Berkshire Hills Bancorp has a consensus target price of $35.00, indicating a potential upside of 1.89%. Given First Bank’s stronger consensus rating and higher probable upside, equities research analysts plainly believe First Bank is more favorable than Berkshire Hills Bancorp.

Volatility & Risk

First Bank has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Berkshire Hills Bancorp has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Dividends

First Bank pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Berkshire Hills Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 2.4%. First Bank pays out 12.5% of its earnings in the form of a dividend. Berkshire Hills Bancorp pays out 46.2% 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. Berkshire Hills Bancorp has raised its dividend for 2 consecutive years. Berkshire Hills Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares First Bank and Berkshire Hills Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Bank	17.19%	N/A	N/A
Berkshire Hills Bancorp	15.03%	6.93%	0.85%

Insider & Institutional Ownership

29.3% of First Bank shares are owned by institutional investors. Comparatively, 62.8% of Berkshire Hills Bancorp shares are owned by institutional investors. 1.7% of Berkshire Hills Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Berkshire Hills Bancorp beats First Bank on 11 of the 17 factors compared between the two stocks.

About First Bank

First Bank is a commercial bank. The Company provides a range of lending, deposit and other financial products and services. It operates through Community Banking segment, which is engaged in providing a range of commercial and retail and related banking services. It offers a range of lending products to meet the needs of its customers located within its market areas, including commercial and industrial loans, commercial real estate loans (including owner-occupied, investor, construction and development and multi-family loans), residential real estate loans, and consumer and other loans. It offers a range of deposit instruments, including non-interest bearing demand deposits (such as checking accounts), interest bearing demand accounts, money market accounts, savings accounts and certificates of deposit. It operates over 10 branches located in Cranbury, Denville, Ewing, Flemington, Hamilton, Lawrence, Somerset, Randolph and Williamstown, New Jersey, and Trevose, Pennsylvania.

About Berkshire Hills Bancorp

Berkshire Hills Bancorp, Inc. (Berkshire) is a holding company for Berkshire Bank (the Bank) and Berkshire Insurance Group. Berkshire offers a range of deposit, lending, insurance and wealth management products to retail, commercial, not-for-profit and municipal customers in its market areas. Berkshire product offerings also include retail and commercial electronic banking, commercial cash management and commercial interest rate swaps. The Bank’s loan portfolio consists of commercial loans, which include residential mortgages, commercial real estate, commercial and industrial loans, and consumer loans. The Bank’s securities available for sale include municipal bonds and obligations, mortgage-backed securities, other bonds and obligations, and marketable equity securities. As of December 5, 2016, the Bank had 99 full service branch offices in Massachusetts, New York, Connecticut, Vermont, New Jersey and Pennsylvania.