Reviewing First Interstate BancSystem (NASDAQ:FIBK) and Citizens & Northern (NASDAQ:CZNC)

First Interstate BancSystem (NASDAQ:FIBK) and Citizens & Northern (NASDAQ:CZNC) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, valuation, risk and profitability.

Insider and Institutional Ownership

78.6% of First Interstate BancSystem shares are held by institutional investors. Comparatively, 29.1% of Citizens & Northern shares are held by institutional investors. 6.8% of First Interstate BancSystem shares are held by company insiders. Comparatively, 3.7% of Citizens & Northern shares are held 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.

Earnings & Valuation

This table compares First Interstate BancSystem and Citizens & Northern’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Interstate BancSystem	$1.11 billion	2.38	$202.20 million	$2.81	8.95
Citizens & Northern	$106.60 million	2.56	$26.62 million	$1.58	11.30

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

Volatility and Risk

First Interstate BancSystem has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Citizens & Northern has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500.

Dividends

First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 7.5%. Citizens & Northern pays an annual dividend of $1.12 per share and has a dividend yield of 6.3%. First Interstate BancSystem pays out 66.9% of its earnings in the form of a dividend. Citizens & Northern pays out 70.9% 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 Interstate BancSystem has raised its dividend for 10 consecutive years. First Interstate BancSystem is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for First Interstate BancSystem and Citizens & Northern, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Interstate BancSystem	0	3	2	0	2.40
Citizens & Northern	0	2	0	0	2.00

First Interstate BancSystem currently has a consensus price target of $34.20, indicating a potential upside of 36.04%. Citizens & Northern has a consensus price target of $23.50, indicating a potential upside of 31.58%. Given First Interstate BancSystem’s stronger consensus rating and higher possible upside, analysts clearly believe First Interstate BancSystem is more favorable than Citizens & Northern.

Profitability

This table compares First Interstate BancSystem and Citizens & Northern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Interstate BancSystem	21.85%	10.44%	1.02%
Citizens & Northern	19.15%	9.87%	1.00%

Summary

First Interstate BancSystem beats Citizens & Northern on 15 of the 17 factors compared between the two stocks.

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. It 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.

About Citizens & Northern

Citizens & Northern Corporation operates as the bank holding company for Citizens & Northern Bank that provides a range of banking and lending services to individual and corporate customers. The company's lending portfolio includes commercial, mortgage, and consumer loans, as well as specialized instruments such as commercial letters-of-credit; and offers deposit products, which includes various types of checking accounts, passbook and statement savings, money market accounts, interest checking accounts, individual retirement accounts, and certificates of deposit. It provides wealth management services, such as retirement planning, estate planning, estate settlements, and asset management services; and insurance products through broker-dealer, which includes mutual funds, annuities, educational savings accounts, and other investment products through registered agents, as well as offers reinsures credit and mortgage, life and accident, and health insurance products. The company was founded in 1864 and is headquartered in Wellsboro, Pennsylvania.