Reviewing Signature Bank (NASDAQ:SBNY) and First Financial Bankshares (NASDAQ:FFIN)

First Financial Bankshares (NASDAQ:FFINGet Rating) and Signature Bank (NASDAQ:SBNYGet Rating) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.

Earnings and Valuation

This table compares First Financial Bankshares and Signature Bank’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Financial Bankshares $518.58 million 11.55 $227.56 million $1.58 26.57
Signature Bank $2.31 billion 5.77 $918.44 million $17.09 12.88

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

Analyst Ratings

This is a summary of recent recommendations and price targets for First Financial Bankshares and Signature Bank, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Financial Bankshares 0 2 0 0 2.00
Signature Bank 0 0 13 1 3.07

First Financial Bankshares presently has a consensus target price of $48.88, suggesting a potential upside of 17.05%. Signature Bank has a consensus target price of $356.75, suggesting a potential upside of 63.44%. Given Signature Bank’s stronger consensus rating and higher probable upside, analysts clearly believe Signature Bank is more favorable than First Financial Bankshares.

Risk & Volatility

First Financial Bankshares has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, Signature Bank has a beta of 1.78, suggesting that its share price is 78% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
First Financial Bankshares 43.17% 13.52% 1.77%
Signature Bank 43.29% 13.97% 0.96%

Insider & Institutional Ownership

53.4% of First Financial Bankshares shares are held by institutional investors. Comparatively, 96.2% of Signature Bank shares are held by institutional investors. 4.2% of First Financial Bankshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

First Financial Bankshares pays an annual dividend of $0.60 per share and has a dividend yield of 1.4%. Signature Bank pays an annual dividend of $2.24 per share and has a dividend yield of 1.0%. First Financial Bankshares pays out 38.0% of its earnings in the form of a dividend. Signature Bank pays out 13.1% 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 Bankshares has increased its dividend for 13 consecutive years. First Financial Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Signature Bank beats First Financial Bankshares on 12 of the 18 factors compared between the two stocks.

About First Financial Bankshares (Get Rating)

First Financial Bankshares, Inc., through its subsidiaries, provides commercial banking products and services in Texas. The company accepts checking, savings and money market accounts, and time deposits; commercial and industrial, municipal, agricultural, construction and development, farm, non-owner occupied and owner-occupied commercial real estate, residential, and consumer auto and non-auto loans to businesses, professional individuals, and farm and ranch operations. It also provides drive-in and night deposit, remote deposit capture, internet and mobile banking, payroll cards, transmitting funds, and other customary commercial banking services, as well as automated teller machines and safe deposit facilities. In addition, the company offers personal trust services, including wealth management, administration of estates, testamentary trusts, revocable and irrevocable trusts, and agency accounts; and securities brokerage services, as well as administer retirements and employee benefits accounts, such as 401(k) profit-sharing plans and IRAs. Further, the company provides asset management and technology services. As of December 31, 2021, it had 78 financial centers across Texas. First Financial Bankshares, Inc. was founded in 1890 and is headquartered in Abilene, Texas.

About Signature Bank (Get Rating)

Signature Bank provides commercial banking products and services. It accepts various deposit products, including checking accounts, money market accounts, escrow deposit accounts, cash concentration accounts, certificates of deposit, and other cash management products. The company provides various lending products comprising commercial and industrial loans, real estate loans, and letters of credit. In addition, it offers asset management and investment products; and retirement products, such as individual retirement accounts and administrative services for retirement vehicles. Further, the company provides wealth management services to its high net worth personal clients; and purchases, sells, and assembles small business administration loans and pools. Additionally, it offers individual and group insurance products, including health, life, disability, and long-term care insurance products for business and private clients. As of December 31, 2021, the company operated 37 private client offices located in the metropolitan New York area, Connecticut, California, and North Carolina. Signature Bank was incorporated in 2000 and is headquartered in New York, New York.

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