Contrasting BancFirst (NASDAQ:BANF) and First Financial Bankshares (NASDAQ:FFIN)

BancFirst (NASDAQ:BANF) and First Financial Bankshares (NASDAQ:FFIN) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BancFirst	24.05%	14.38%	1.71%
First Financial Bankshares	31.01%	14.69%	1.75%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for BancFirst and First Financial Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BancFirst	0	2	0	0	2.00
First Financial Bankshares	0	4	0	0	2.00

BancFirst presently has a consensus target price of $134.00, indicating a potential upside of 5.91%. First Financial Bankshares has a consensus target price of $39.25, indicating a potential upside of 9.36%. Given First Financial Bankshares’ higher possible upside, analysts plainly believe First Financial Bankshares is more favorable than BancFirst.

Risk & Volatility

BancFirst has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, First Financial Bankshares has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Institutional and Insider Ownership

51.7% of BancFirst shares are owned by institutional investors. Comparatively, 69.8% of First Financial Bankshares shares are owned by institutional investors. 32.4% of BancFirst shares are owned by company insiders. Comparatively, 4.0% of First Financial Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

BancFirst pays an annual dividend of $1.84 per share and has a dividend yield of 1.5%. First Financial Bankshares pays an annual dividend of $0.76 per share and has a dividend yield of 2.1%. BancFirst pays out 26.5% of its earnings in the form of a dividend. First Financial Bankshares pays out 44.2% 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. BancFirst has increased its dividend for 31 consecutive years and First Financial Bankshares has increased its dividend for 15 consecutive years.

Earnings & Valuation

This table compares BancFirst and First Financial Bankshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BancFirst	$908.71 million	4.63	$216.35 million	$6.95	18.20
First Financial Bankshares	$752.91 million	6.82	$223.51 million	$1.72	20.87

First Financial Bankshares has lower revenue, but higher earnings than BancFirst. BancFirst 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.

Summary

First Financial Bankshares beats BancFirst on 10 of the 15 factors compared between the two stocks.

About BancFirst

BancFirst Corporation operates as the bank holding company for BancFirst that provides a range of commercial banking services to retail customers, and small to medium-sized businesses. The company operates through BancFirst Metropolitan Banks, BancFirst Community Banks, Pegasus, Worthington, and Other Financial Services segments. It offers checking accounts, negotiable order of withdrawal accounts, savings accounts, money market accounts, sweep accounts, club accounts, individual retirement accounts, and certificates of deposit, as well as overdraft protection and auto draft services. The company also provides commercial and agricultural non-real estate loans for working capital, facilities acquisition or expansion, purchase of equipment, and other needs; lending services that include private banking, energy, commercial and residential real estate, and commercial and industrial loans; and loans to finance purchases of consumer goods, such as automobiles, boats, household goods, vacations, and education. In addition, it engages in the investment management and administration of trusts for individuals, corporations, and employee benefit plans, as well as bond trustee and paying agent business for various Oklahoma municipalities and governmental entities; and provision of item processing, research, and other correspondent banking services to financial institutions and governmental units. Further, the company provides insurance agency services; depository and funds transfer, collection, safe deposit box, cash management, and other services. It serves customers in non-metropolitan trade centers and cities in the metropolitan statistical areas of Oklahoma. The company was formerly known as United Community Corporation and changed its name to BancFirst Corporation in November 1988. BancFirst Corporation was incorporated in 1984 and is headquartered in Oklahoma City, Oklahoma.

About First Financial Bankshares

First Financial Bankshares, Inc., through its subsidiaries, provides commercial banking products and services in Texas. The company offers checking, savings and time deposits; automated teller machines, drive-in, and night deposit services; safe deposit facilities, remote deposit capture, internet banking, mobile banking, payroll cards, funds transfer, and performing other customary commercial banking services; securities brokerage services; and trust and wealth management services, including wealth management, estates administration, oil and gas management, testamentary trusts, revocable and irrevocable trusts, and agency accounts. It also provides commercial and industrial, municipal, agricultural, construction and development, farm, residential, and consumer auto and non-auto, as well as non-owner occupied and owner occupied commercial real estate loans. In addition, the company offers advisory and specialized services related to asset management, investing, purchasing, advertising, public relations, and technology services. First Financial Bankshares, Inc. was founded in 1890 and is headquartered in Abilene, Texas.