Comparing First Financial (NASDAQ:THFF) and Peoples Financial (OTCMKTS:PFBX)

First Financial (NASDAQ:THFFGet Rating) and Peoples Financial (OTCMKTS:PFBXGet Rating) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.

Institutional & Insider Ownership

67.2% of First Financial shares are owned by institutional investors. Comparatively, 11.4% of Peoples Financial shares are owned by institutional investors. 3.4% of First Financial shares are owned by company insiders. Comparatively, 28.1% of Peoples Financial shares are owned 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for First Financial and Peoples Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Financial 0 0 1 0 3.00
Peoples Financial 0 0 0 0 N/A

First Financial currently has a consensus target price of $49.00, suggesting a potential upside of 10.53%. Given First Financial’s higher possible upside, research analysts clearly believe First Financial is more favorable than Peoples Financial.

Profitability

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

Net Margins Return on Equity Return on Assets
First Financial 30.36% 11.57% 1.34%
Peoples Financial 19.02% 5.79% 0.61%

Dividends

First Financial pays an annual dividend of $1.06 per share and has a dividend yield of 2.4%. Peoples Financial pays an annual dividend of $0.18 per share and has a dividend yield of 1.2%. First Financial pays out 22.4% of its earnings in the form of a dividend. Peoples Financial pays out 16.8% 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. First Financial has raised its dividend for 1 consecutive years and Peoples Financial has raised its dividend for 2 consecutive years.

Valuation and Earnings

This table compares First Financial and Peoples Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Financial $194.28 million 2.83 $52.99 million $4.73 9.37
Peoples Financial $26.76 million 2.67 $8.58 million $1.07 14.26

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

Volatility and Risk

First Financial has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Peoples Financial has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500.

Summary

First Financial beats Peoples Financial on 12 of the 16 factors compared between the two stocks.

First Financial Company Profile (Get Rating)

First Financial Corporation, through its subsidiaries, provides various financial services. It offers non-interest-bearing demand, interest-bearing demand, savings, time, and other time deposits. The company also provides commercial loans primarily to expand a business or finance asset purchases; residential real estate and residential real estate construction loans; and home equity loans and lines, secured loans, and cash/CD secured and unsecured loans. In addition, it offers lease financing, trust account, depositor, and insurance services. The company operates 78 branches in west-central Indiana, east-central Illinois, western Kentucky, and middle and western Tennessee. First Financial Corporation was founded in 1834 and is headquartered in Terre Haute, Indiana.

Peoples Financial Company Profile (Get Rating)

Peoples Financial Corporation operates as the bank holding company for The Peoples Bank that provides banking, financial, and trust services to government entities, individuals, and small and commercial businesses in Mississippi. It accepts various deposits, such as interest and non-interest bearing checking accounts, savings accounts, certificates of deposit, and individual retirement accounts (IRAs). The company also offers business, commercial, real estate, construction, personal, and installment loans; and personal trust, agencies, and estate services, including living and testamentary trusts, executorships, guardianships, and conservatorships. In addition, it provides self-directed IRAs; and escrow management, stock transfer, and bond paying agency accounts to corporate customers. Further, the company offers various other services consisting of safe deposit box rental, wire transfer, night drop facilities, collection, cash management, and internet banking services. As of December 31, 2021, the company operated through 17 branches located in Harrison, Hancock, Jackson, and Stone counties. It also has 28 automated teller machines at its branch locations, as well as other off-site and non-proprietary locations. The company was founded in 1896 and is headquartered in Biloxi, Mississippi.

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