Comparing First Commonwealth Financial (NYSE:FCF) and Cullen/Frost Bankers (NYSE:CFR)

First Commonwealth Financial (NYSE:FCF) and Cullen/Frost Bankers (NYSE:CFR) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Dividends

First Commonwealth Financial pays an annual dividend of $0.40 per share and has a dividend yield of 2.8%. Cullen/Frost Bankers pays an annual dividend of $2.84 per share and has a dividend yield of 3.0%. First Commonwealth Financial pays out 36.4% of its earnings in the form of a dividend. Cullen/Frost Bankers pays out 41.2% 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 Commonwealth Financial has raised its dividend for 2 consecutive years and Cullen/Frost Bankers has raised its dividend for 26 consecutive years. Cullen/Frost Bankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

First Commonwealth Financial has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500. Comparatively, Cullen/Frost Bankers has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for First Commonwealth Financial and Cullen/Frost Bankers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Commonwealth Financial 0 1 2 0 2.67
Cullen/Frost Bankers 3 2 2 0 1.86

First Commonwealth Financial currently has a consensus target price of $16.00, suggesting a potential upside of 12.83%. Cullen/Frost Bankers has a consensus target price of $91.86, suggesting a potential downside of 3.80%. Given First Commonwealth Financial’s stronger consensus rating and higher possible upside, analysts clearly believe First Commonwealth Financial is more favorable than Cullen/Frost Bankers.

Profitability

This table compares First Commonwealth Financial and Cullen/Frost Bankers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Commonwealth Financial 26.01% 10.76% 1.36%
Cullen/Frost Bankers 30.76% 13.11% 1.43%

Institutional & Insider Ownership

67.2% of First Commonwealth Financial shares are held by institutional investors. Comparatively, 82.5% of Cullen/Frost Bankers shares are held by institutional investors. 1.5% of First Commonwealth Financial shares are held by insiders. Comparatively, 4.8% of Cullen/Frost Bankers shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares First Commonwealth Financial and Cullen/Frost Bankers’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Commonwealth Financial $380.89 million 3.66 $107.50 million $1.10 12.89
Cullen/Frost Bankers $1.40 billion 4.26 $454.91 million $6.90 13.84

Cullen/Frost Bankers has higher revenue and earnings than First Commonwealth Financial. First Commonwealth Financial is trading at a lower price-to-earnings ratio than Cullen/Frost Bankers, indicating that it is currently the more affordable of the two stocks.

Summary

Cullen/Frost Bankers beats First Commonwealth Financial on 13 of the 16 factors compared between the two stocks.

About First Commonwealth Financial

First Commonwealth Financial Corporation, through its subsidiaries, provides consumer and commercial banking services to individuals, and small and mid-sized businesses in the United States. Its consumer services include personal checking accounts, interest-earning checking accounts, savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection, IRA accounts, and automated teller machine (ATM) services, as well as Internet, mobile, and telephone banking services. The company's commercial banking services comprise commercial lending, business checking accounts, online account management services, payroll direct deposits, commercial cash management services, and repurchase agreements, as well as ACH origination services. It also offers various trust and asset management services; auto, home, and business insurance, as well as term life insurance; and annuities, mutual funds, and stock and bond brokerage services through a broker-dealer and insurance brokers. As of March 4, 2019, the company operated 137 community banking offices in western and central Pennsylvania, as well as northeastern, central, and southwestern Ohio. It also leases 3 mortgage loan production offices and 3 corporate loan production offices, as well as operates a network of 150 automated teller machines. First Commonwealth Financial Corporation was founded in 1934 and is headquartered in Indiana, Pennsylvania.

About Cullen/Frost Bankers

Cullen/Frost Bankers, Inc. operates as the holding company for Frost Bank that offers commercial and consumer banking services in Texas. It operates in two segments, Banking and Frost Wealth Advisors. The company offers commercial banking services to corporations and other business clients, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; commercial leasing; and treasury management services. It also provides consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. In addition, the company offers international banking services comprising deposits, loans, letters of credit, foreign collections, funds, and foreign exchange services. Further, it acts as a correspondent for approximately 194 financial institutions; offers trust, investment, agency, and custodial services for individual and corporate clients; provides capital market services that include sales and trading, new issue underwriting, money market trading, advisory, and securities safekeeping and clearance; and supports international business activities. Additionally, the company offers insurance and securities brokerage services; holds securities for investment purposes; and provides loans to qualified borrowers, as well as investment management services to Frost-managed mutual funds, institutions, and individuals. It operates approximately 131 financial centers and 1,200 ATMs. The company serves the energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. Cullen/Frost Bankers, Inc. was founded in 1868 and is headquartered in San Antonio, Texas.

Receive News & Ratings for First Commonwealth Financial Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for First Commonwealth Financial and related companies with MarketBeat.com's FREE daily email newsletter.