Business First Bancshares (NASDAQ:BFST – Get Free Report) and Eastern Bankshares (NASDAQ:EBC – Get Free Report) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.
Analyst Recommendations
This is a breakdown of recent recommendations for Business First Bancshares and Eastern Bankshares, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Business First Bancshares | 0 | 0 | 4 | 0 | 3.00 |
| Eastern Bankshares | 0 | 3 | 4 | 1 | 2.75 |
Business First Bancshares currently has a consensus price target of $32.33, suggesting a potential upside of 17.58%. Eastern Bankshares has a consensus price target of $22.70, suggesting a potential upside of 12.04%. Given Business First Bancshares’ stronger consensus rating and higher possible upside, equities analysts clearly believe Business First Bancshares is more favorable than Eastern Bankshares.
Volatility and Risk
Earnings and Valuation
This table compares Business First Bancshares and Eastern Bankshares”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Business First Bancshares | $516.55 million | 1.74 | $87.86 million | $2.82 | 9.75 |
| Eastern Bankshares | $1.33 billion | 3.58 | $88.22 million | $1.78 | 11.38 |
Eastern Bankshares has higher revenue and earnings than Business First Bancshares. Business First Bancshares is trading at a lower price-to-earnings ratio than Eastern Bankshares, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Business First Bancshares and Eastern Bankshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Business First Bancshares | 17.02% | 11.51% | 1.15% |
| Eastern Bankshares | 26.28% | 8.60% | 1.25% |
Institutional and Insider Ownership
47.4% of Business First Bancshares shares are held by institutional investors. Comparatively, 71.7% of Eastern Bankshares shares are held by institutional investors. 5.7% of Business First Bancshares shares are held by company insiders. Comparatively, 1.3% of Eastern Bankshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Dividends
Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. Eastern Bankshares pays an annual dividend of $0.52 per share and has a dividend yield of 2.6%. Business First Bancshares pays out 21.3% of its earnings in the form of a dividend. Eastern Bankshares pays out 29.2% 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. Business First Bancshares has increased its dividend for 2 consecutive years and Eastern Bankshares has increased its dividend for 5 consecutive years. Eastern Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Eastern Bankshares beats Business First Bancshares on 10 of the 17 factors compared between the two stocks.
About Business First Bancshares
Business First Bancshares, Inc. operates as the bank holding company for b1BANK that provides various banking products and services in Louisiana and Texas. It offers various deposit products and services, including checking, demand, money market, time, and savings accounts; and certificates of deposits, remote deposit capture, and direct deposit services. The company also provides commercial and industrial loans, such as working capital, term, equipment financing, asset acquisition, expansion and development, borrowing base, and other loan products, as well as commercial lines of credit, accounts receivable factoring, agricultural financing, and letters of credit; construction and development loans; commercial real estate loans; residential real estate loans comprising first and second lien 1-4 family mortgage loans, and home equity lines of credit; and consumer loans, including secured and unsecured installment, and term loans. In addition, it offers wealth management products, including mutual funds, annuities, individual retirement accounts, and other financial products, as well as other fiduciary and private banking products and services. Further, the company provides a range of other financial services comprising debit and credit cards, treasury and cash management, merchant, automated clearing house, lock-box, receivables factoring, correspondent banking, and other treasury services, as well as employee and payroll benefits solutions; and drive-through banking facilities, automated teller machines, night depository, personalized checks, electronic funds transfer, domestic and foreign wire transfer, traveler's checks, vault, loan and deposit sweep accounts, online and mobile banking, e-statements, and bank-by-mail services. Business First Bancshares, Inc. was founded in 2006 and is headquartered in Baton Rouge, Louisiana.
About Eastern Bankshares
Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.
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