BancorpSouth Bank (BXS) & First Interstate Bancsystem (FIBK) Head-To-Head Review

BancorpSouth Bank (NYSE: BXS) and First Interstate Bancsystem (NASDAQ:FIBK) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitability, institutional ownership and valuation.

Profitability

This table compares BancorpSouth Bank and First Interstate Bancsystem’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BancorpSouth Bank 19.59% 9.01% 1.03%
First Interstate Bancsystem 19.90% 9.37% 1.07%

Volatility & Risk

BancorpSouth Bank has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500. Comparatively, First Interstate Bancsystem has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Dividends

BancorpSouth Bank pays an annual dividend of $0.56 per share and has a dividend yield of 1.8%. First Interstate Bancsystem pays an annual dividend of $0.96 per share and has a dividend yield of 2.4%. BancorpSouth Bank pays out 33.7% of its earnings in the form of a dividend. First Interstate Bancsystem pays out 46.8% 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. BancorpSouth Bank has raised its dividend for 5 consecutive years.

Valuation and Earnings

This table compares BancorpSouth Bank and First Interstate Bancsystem’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BancorpSouth Bank $781.02 million 3.67 $153.03 million $1.66 19.10
First Interstate Bancsystem $433.92 million 5.21 $106.52 million $2.05 19.54

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

Insider & Institutional Ownership

66.5% of BancorpSouth Bank shares are held by institutional investors. Comparatively, 45.5% of First Interstate Bancsystem shares are held by institutional investors. 2.6% of BancorpSouth Bank shares are held by insiders. Comparatively, 38.2% of First Interstate Bancsystem shares are held by 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 Ratings

This is a breakdown of recent recommendations for BancorpSouth Bank and First Interstate Bancsystem, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BancorpSouth Bank 0 7 1 0 2.13
First Interstate Bancsystem 0 1 3 0 2.75

BancorpSouth Bank currently has a consensus target price of $34.14, indicating a potential upside of 7.71%. First Interstate Bancsystem has a consensus target price of $45.00, indicating a potential upside of 12.36%. Given First Interstate Bancsystem’s stronger consensus rating and higher possible upside, analysts plainly believe First Interstate Bancsystem is more favorable than BancorpSouth Bank.

Summary

First Interstate Bancsystem beats BancorpSouth Bank on 10 of the 17 factors compared between the two stocks.

BancorpSouth Bank Company Profile

BancorpSouth Bank is a financial holding company. The Company, through its principal bank subsidiary, conducts commercial banking and financial services operations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee, Texas and Illinois. The Company’s segments include Community Banking, Insurance Agencies, and General Corporate and Other. Its Community Banking segment provides a range of deposit products, commercial loans and consumer loans. Its Insurance Agencies segment serves as agents in the sale of commercial lines of insurance and full lines of property and casualty, life, health and employee benefits products and services. Its General Corporate and Other segment includes mortgage banking, trust services, credit card activities, investment services and other activities not allocated to the Community Banking or Insurance Agencies segments.

First Interstate Bancsystem Company Profile

First Interstate BancSystem, Inc. is a financial and bank holding company. The Company, through its bank subsidiary First Interstate Bank (the Bank), delivers a range of banking products and services to individuals, businesses, municipalities and other entities. The Company also, through its subsidiary Bank of the Cascades, offers full-service community banking through 46 branches in Oregon, Idaho and Washington. The Company operates through community banking segment. Its community banking segment provides customers with commercial and consumer banking products and services in its market areas through community service activities. In addition to its primary emphasis on commercial and consumer banking services, the Company also offers trust, employee benefit, investment and insurance services through its bank subsidiary. As of December 31, 2016, it operated 80 banking offices, including detached drive-up facilities, in 46 communities located in Montana, Wyoming and South Dakota.

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