Business First Bancshares (NASDAQ:BFST – Get Free Report) and Shinhan Financial Group (NYSE:SHG – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.
Risk and Volatility
Business First Bancshares has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Shinhan Financial Group has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.
Insider & Institutional Ownership
47.4% of Business First Bancshares shares are held by institutional investors. Comparatively, 7.8% of Shinhan Financial Group shares are held by institutional investors. 5.7% of Business First Bancshares shares are held by company insiders. Comparatively, 1.0% of Shinhan Financial Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a summary of current recommendations and price targets for Business First Bancshares and Shinhan Financial Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Business First Bancshares | 0 | 0 | 5 | 0 | 3.00 |
| Shinhan Financial Group | 0 | 0 | 1 | 1 | 3.50 |
Business First Bancshares currently has a consensus target price of $34.75, suggesting a potential upside of 10.99%. Given Business First Bancshares’ higher possible upside, equities analysts plainly believe Business First Bancshares is more favorable than Shinhan Financial Group.
Profitability
This table compares Business First Bancshares and Shinhan Financial Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Business First Bancshares | 17.07% | 11.03% | 1.13% |
| Shinhan Financial Group | 15.69% | 8.63% | 0.66% |
Dividends
Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. Shinhan Financial Group pays an annual dividend of $1.71 per share and has a dividend yield of 2.4%. Business First Bancshares pays out 21.3% of its earnings in the form of a dividend. Shinhan Financial Group pays out 23.0% 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 raised its dividend for 2 consecutive years.
Valuation and Earnings
This table compares Business First Bancshares and Shinhan Financial Group”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Business First Bancshares | $516.55 million | 1.97 | $87.86 million | $2.82 | 11.10 |
| Shinhan Financial Group | $23.83 billion | 1.39 | $3.48 billion | $7.44 | 9.46 |
Shinhan Financial Group has higher revenue and earnings than Business First Bancshares. Shinhan Financial Group is trading at a lower price-to-earnings ratio than Business First Bancshares, indicating that it is currently the more affordable of the two stocks.
Summary
Business First Bancshares beats Shinhan Financial Group on 11 of the 18 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 Shinhan Financial Group
Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; business expansion financing and consulting services; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers real estate trust, investment advisory, venture business investment, life and non-life insurance, trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. Additionally, it provides transaction history inquiries and fund transfers, opening letters of credit, trade finance, payment and collection management, sales and acquisition settlement, business-to-business settlement, sweeping, pooling, ERP interface, host-to-host banking, SWIFT SCORE, and cash and liquidity management service. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.
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