First BanCorp. (NYSE:FBP) versus National Bank (NYSE:NBHC) Financial Analysis

National Bank (NYSE:NBHC) and First BanCorp. (NYSE:FBP) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.

Dividends

National Bank pays an annual dividend of $1.28 per share and has a dividend yield of 3.2%. First BanCorp. pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. National Bank pays out 53.8% of its earnings in the form of a dividend. First BanCorp. pays out 33.8% 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. National Bank has increased its dividend for 10 consecutive years and First BanCorp. has increased its dividend for 6 consecutive years. National Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares National Bank and First BanCorp.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bank	15.11%	8.35%	1.13%
First BanCorp.	29.24%	18.03%	1.84%

Volatility & Risk

National Bank has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, First BanCorp. has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.

Institutional & Insider Ownership

92.7% of National Bank shares are owned by institutional investors. Comparatively, 97.9% of First BanCorp. shares are owned by institutional investors. 6.8% of National Bank shares are owned by insiders. Comparatively, 1.9% of First BanCorp. shares are owned 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.

Earnings and Valuation

This table compares National Bank and First BanCorp.”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bank	$587.34 million	3.05	$109.57 million	$2.38	16.92
First BanCorp.	$1.26 billion	3.35	$344.87 million	$2.37	11.61

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

Analyst Ratings

This is a breakdown of current ratings for National Bank and First BanCorp., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bank	0	2	3	0	2.60
First BanCorp.	0	2	3	4	3.22

National Bank presently has a consensus price target of $47.67, indicating a potential upside of 18.40%. First BanCorp. has a consensus price target of $29.38, indicating a potential upside of 6.78%. Given National Bank’s higher probable upside, equities analysts plainly believe National Bank is more favorable than First BanCorp..

Summary

First BanCorp. beats National Bank on 11 of the 17 factors compared between the two stocks.

About National Bank

National Bank Holdings Corporation operates as the bank holding company for NBH Bank that provides various banking products and financial services to commercial, business, and consumer clients in the United States. It offers deposit products, including checking, savings, money market, and other deposit accounts, including fixed-rate and fixed maturity time deposits. The company also provides commercial and industrial loans and leases, such as working capital loans, equipment loans, lender finance loans, food and agriculture loans, government and non-profit loans, owner occupied commercial real estate loans, and other commercial loans and leases; non-owner occupied commercial real estate loans consisting of loans on commercial properties, such as office buildings, warehouse/distribution buildings, multi-family, hospitality, and retail buildings; small business administration loans to support small businesses and entrepreneurs; term loans, line of credits, and real estate secured loans; residential real estate loans; and consumer loans. In addition, it offers treasury management solutions comprising online and mobile banking, commercial credit card, wire transfer, automated clearing house, electronic bill payment, lock box, remote deposit capture, merchant processing, cash vault, controlled disbursements, and fraud prevention services, as well as other auxiliary services, including account reconciliation, collections, repurchase accounts, zero balance accounts, and sweep accounts. The company operates through a network of banking centers located in Colorado, the greater Kansas City region, New Mexico, Utah, Wyoming, Idaho, and Texas. It also operates ATMs. The company was formerly known as NBH Holdings Corp. and changed its name to National Bank Holdings Corporation in March 2012. The company was incorporated in 2009 and is headquartered in Greenwood Village, Colorado.

About First BanCorp.

First BanCorp. operates as a bank holding company for FirstBank Puerto Rico that provides a range of financial products and services to consumers and commercial customers. The company operates through six segments: Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans, as well as other products, such as cash management and business management services. The Mortgage Banking segment engages in the origination, sale, and servicing of various residential mortgage loans; hedging activities; and purchase of mortgage loans from branch and mortgage bankers. The Consumer (Retail) Banking segment provides auto loans, finance leases, boat and personal loans, credit card loans, and lines of credit; and interest-bearing and non-interest-bearing checking and savings accounts, and individual retirement accounts and retail certificates of deposit (CDs), as well as insurance agency services. The Treasury and Investments segment offers funding and liquidity management services. The United States Operations segment provides checking, savings, and money market accounts, as well as retail CDs; traditional commercial and industrial, and commercial real estate loans, residential mortgages, term and construction loan, home equity loans, lines of credit, FHLB advances, and brokered CDs; and internet banking, cash management, remote deposit capture, and automated clearing house transactions services. The Virgin Islands Operations segment is involved in consumer, commercial lending, and deposit-taking activities. First BanCorp. was founded in 1948 and is headquartered in San Juan, Puerto Rico.