Contrasting Associated Banc (NYSE:ASB) and First Business Financial Services (NASDAQ:FBIZ)

Associated Banc (NYSE:ASB) and First Business Financial Services (NASDAQ:FBIZ) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Insider and Institutional Ownership

83.0% of Associated Banc shares are held by institutional investors. Comparatively, 60.1% of First Business Financial Services shares are held by institutional investors. 1.5% of Associated Banc shares are held by insiders. Comparatively, 5.1% of First Business Financial Services shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Associated Banc and First Business Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Associated Banc	7.23%	9.45%	0.98%
First Business Financial Services	17.59%	14.22%	1.17%

Valuation and Earnings

This table compares Associated Banc and First Business Financial Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Associated Banc	$1.15 billion	3.65	$123.14 million	$0.94	27.03
First Business Financial Services	$161.10 million	2.60	$44.24 million	$5.62	8.94

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

Analyst Ratings

This is a summary of current recommendations and price targets for Associated Banc and First Business Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Associated Banc	0	7	3	0	2.30
First Business Financial Services	0	0	4	0	3.00

Associated Banc currently has a consensus target price of $28.44, suggesting a potential upside of 11.96%. First Business Financial Services has a consensus target price of $59.67, suggesting a potential upside of 18.79%. Given First Business Financial Services’ stronger consensus rating and higher possible upside, analysts plainly believe First Business Financial Services is more favorable than Associated Banc.

Dividends

Associated Banc pays an annual dividend of $0.92 per share and has a dividend yield of 3.6%. First Business Financial Services pays an annual dividend of $1.16 per share and has a dividend yield of 2.3%. Associated Banc pays out 97.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. First Business Financial Services pays out 20.6% of its earnings in the form of a dividend. Associated Banc has increased its dividend for 13 consecutive years and First Business Financial Services has increased its dividend for 13 consecutive years.

Risk and Volatility

Associated Banc has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, First Business Financial Services has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.

Summary

First Business Financial Services beats Associated Banc on 9 of the 16 factors compared between the two stocks.

About Associated Banc

Associated Banc-Corp, a bank holding company, provides various banking and nonbanking products to individuals and businesses in Wisconsin, Illinois, and Minnesota. The company offers lending solutions, including commercial loans and lines of credit, commercial real estate financing, construction loans, letters of credit, leasing, asset based lending and equipment finance, loan syndications products, residential mortgages, home equity loans and lines of credit, personal and installment loans, auto finance and business loans, and business lines of credit. It also provides deposit and cash management solutions, such as commercial checking and interest-bearing deposit products, cash vault and night depository services, liquidity solutions, payables and receivables solutions, and information services; specialized financial services, such as interest rate risk management and foreign exchange solutions; fiduciary services, such as administration of pension, profit-sharing and other employee benefit plans, fiduciary and corporate agency services, and institutional asset management services; and investable funds solutions, including savings, money market deposit accounts, IRA accounts, CDs, fixed and variable annuities, full-service, discount, and online investment brokerage; investment advisory services; and trust and investment management accounts. In addition, the company offers deposit and transactional solutions, including checking, credit, debit and pre-paid cards, online banking and bill pay; and money transfer services. Associated Banc-Corp was founded in 1861 and is headquartered in Green Bay, Wisconsin.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.