Financial Contrast: First Interstate BancSystem (NASDAQ:FIBK) versus UMB Financial (NASDAQ:UMBF)

UMB Financial (NASDAQ:UMBF) and First Interstate BancSystem (NASDAQ:FIBK) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Risk and Volatility

UMB Financial has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, First Interstate BancSystem has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Earnings & Valuation

This table compares UMB Financial and First Interstate BancSystem”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UMB Financial	$2.16 billion	3.81	$441.24 million	$8.83	12.28
First Interstate BancSystem	$1.01 billion	3.26	$226.00 million	$2.37	13.22

UMB Financial has higher revenue and earnings than First Interstate BancSystem. UMB Financial 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.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for UMB Financial and First Interstate BancSystem, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UMB Financial	0	3	9	1	2.85
First Interstate BancSystem	1	3	3	0	2.29

UMB Financial currently has a consensus price target of $137.20, suggesting a potential upside of 26.57%. First Interstate BancSystem has a consensus price target of $35.57, suggesting a potential upside of 13.54%. Given UMB Financial’s stronger consensus rating and higher probable upside, research analysts plainly believe UMB Financial is more favorable than First Interstate BancSystem.

Dividends

UMB Financial pays an annual dividend of $1.72 per share and has a dividend yield of 1.6%. First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 6.0%. UMB Financial pays out 19.5% of its earnings in the form of a dividend. First Interstate BancSystem pays out 79.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. UMB Financial has raised its dividend for 32 consecutive years.

Insider & Institutional Ownership

87.8% of UMB Financial shares are owned by institutional investors. Comparatively, 88.7% of First Interstate BancSystem shares are owned by institutional investors. 5.5% of UMB Financial shares are owned by company insiders. Comparatively, 8.2% of First Interstate BancSystem shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares UMB Financial and First Interstate BancSystem’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UMB Financial	16.01%	12.15%	1.11%
First Interstate BancSystem	16.04%	7.30%	0.87%

Summary

UMB Financial beats First Interstate BancSystem on 12 of the 18 factors compared between the two stocks.

About UMB Financial

UMB Financial Corporation operates as the bank holding company that provides banking services and asset servicing in the United States and internationally. The Commercial Banking segment provides commercial loans and credit card; commercial real estate financing; letters of credit; loan syndication, and consultative service; various business solutions including asset-based lending, mezzanine debt, and minority equity investment; and treasury management service, such as depository service, account reconciliation, cash management tool, accounts payable and receivable solution, electronic fund transfer and automated payment, controlled disbursement, lockbox service, and remote deposit capture service. The Institutional Banking segment offers fund, asset management, and healthcare service to institutional clients; and fund administration and accounting, investor service and transfer agency, mutual fund service, alternative investment service, fixed income sale, trading and underwriting, and corporate trust and escrow service, as well as institutional custody service. This segment also provides healthcare payment solution includes custodial service for health saving accounts and private label, multipurpose debit cards to insurance carriers, third-party administrator, software companies, employers, and financial institutions. The Personal Banking segment offers deposit account, retail credit card, private banking, installment loan, home equity line of credit, residential mortgage, as well as internet banking, ATM network, private banking, brokerage and insurance service, and investment advisory, custody, and trust services. It operates through a network of branches and offices. The company was founded in 1913 and is headquartered in Kansas City, Missouri.

About First Interstate BancSystem

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides range of banking products and services in the United States. It offers various traditional depository products, including checking, savings, and time deposits; and repurchase agreements primarily for commercial and municipal depositors. The company also offers real estate loans comprising commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans comprising direct personal loans, credit card loans and lines of credit, and indirect loans; variable and fixed rate commercial loans for small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions; and agricultural loans. In addition, it provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. Further, the company offers marketing, credit review, loan servicing, credit cards issuance and servicing, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, other operational, and specialized staff support services, as well as online and mobile banking services. The company serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, governmental services, healthcare, hospitality, housing, professional services, real estate development, retail, technology, tourism, and wholesale trade. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.