Contrasting Royal Bank Of Canada (NYSE:RY) & First Bank (NASDAQ:FRBA)

First Bank (NASDAQ:FRBA) and Royal Bank Of Canada (NYSE:RY) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Earnings and Valuation

This table compares First Bank and Royal Bank Of Canada”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Bank	$149.77 million	2.98	$43.66 million	$1.69	10.53
Royal Bank Of Canada	$98.11 billion	2.79	$14.54 billion	$11.43	17.32

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

Volatility and Risk

First Bank has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, Royal Bank Of Canada has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Profitability

This table compares First Bank and Royal Bank Of Canada’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Bank	17.45%	9.57%	1.06%
Royal Bank Of Canada	16.17%	17.79%	0.97%

Analyst Ratings

This is a summary of recent ratings and recommmendations for First Bank and Royal Bank Of Canada, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Bank	0	2	3	0	2.60
Royal Bank Of Canada	0	5	7	1	2.69

First Bank currently has a consensus price target of $19.67, suggesting a potential upside of 10.49%. Royal Bank Of Canada has a consensus price target of $225.00, suggesting a potential upside of 13.67%. Given Royal Bank Of Canada’s stronger consensus rating and higher possible upside, analysts plainly believe Royal Bank Of Canada is more favorable than First Bank.

Insider & Institutional Ownership

64.9% of First Bank shares are owned by institutional investors. Comparatively, 45.3% of Royal Bank Of Canada shares are owned by institutional investors. 13.1% of First Bank shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

First Bank pays an annual dividend of $0.36 per share and has a dividend yield of 2.0%. Royal Bank Of Canada pays an annual dividend of $4.96 per share and has a dividend yield of 2.5%. First Bank pays out 21.3% of its earnings in the form of a dividend. Royal Bank Of Canada pays out 43.4% 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. Royal Bank Of Canada has increased its dividend for 15 consecutive years. Royal Bank Of Canada is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Royal Bank Of Canada beats First Bank on 12 of the 18 factors compared between the two stocks.

About First Bank

First Bank provides various banking products and services to small to mid-sized businesses and individuals. The company accepts various deposits, including non-interest-bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts, and certificates of deposit, as well as commercial checking accounts. It also offers various loan products comprising commercial and industrial loans, which include line of credit, inventory, equipment, and short-term working capital financing; commercial real estate loans, such as owner-occupied, investor, construction and development, and multi-family loans; residential real estate loans comprising residential mortgages, first and second lien home equity loans, and revolving lines of credit; and consumer and other loans consists of auto, personal, traditional installment, and other loans. The company also provides electronic banking services, including Internet and mobile banking, electronic bill payment, and banking by phone; ATM and debit cards, and wire and ACH transfer services; remote deposit capture; and cash management services, as well as engages in the capital markets activities. It operates full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset, and Williamstown, New Jersey; Doylestown, Trevose, Warminster, and West Chester, Paoli, Malvern, Coventry, Devon, Lionville, and Glen Mills Pennsylvania; and Palm Beach, Florida. First Bank was incorporated in 2007 and is headquartered in Hamilton, New Jersey.

About Royal Bank Of Canada

Royal Bank of Canada operates as a diversified financial service company worldwide. The company's Personal & Commercial Banking segment offers checking and savings accounts, home equity financing, personal lending, private banking, indirect lending, including auto financing, mutual funds and self-directed brokerage accounts, guaranteed investment certificates, credit cards, and payment products and solutions; and lending, leasing, deposit, investment, foreign exchange, cash management, auto dealer financing, trade products, and services to small and medium-sized commercial businesses. This segment offers financial products and services through branches, automated teller machines, and mobile sales network. Its Wealth Management segment provides a suite of wealth, investment, trust, banking, credit, and other advice-based solutions and strategies to high net worth and ultra-high net worth individuals, and institutional clients; asset management products to institutional and individual clients; and asset and investor services to financial institutions, asset managers, and asset owners. The company's Insurance segment offers life, health, home, auto, travel, wealth, annuities, property and casualty, and reinsurance advice and solutions; and business insurance services to individual, business, and group clients through its advice centers, RBC insurance stores, and mobile advisors; digital platforms; and independent brokers and partners. The company's Capital Markets segment offers advisory and origination, sales and trading, lending and financing, and transaction banking services to corporations, institutional clients, asset managers, private equity firms, and governments. The company was founded in 1864 and is headquartered in Toronto, Canada.