Commercial National Financial (OTCMKTS:CEFC) and First Interstate BancSystem (NASDAQ:FIBK) Critical Analysis

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

Earnings and Valuation

This table compares Commercial National Financial and First Interstate BancSystem”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Commercial National Financial	$29.17 million	1.85	$5.86 million	$1.69	8.05
First Interstate BancSystem	$1.48 billion	2.50	$226.00 million	$2.37	15.16

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

Dividends

Commercial National Financial pays an annual dividend of $0.56 per share and has a dividend yield of 4.1%. First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 5.2%. Commercial National Financial pays out 33.1% of its earnings in the form of a dividend. First Interstate BancSystem pays out 79.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Commercial National Financial and First Interstate BancSystem’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Commercial National Financial	23.49%	N/A	N/A
First Interstate BancSystem	17.62%	7.25%	0.87%

Risk & Volatility

Commercial National Financial has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, First Interstate BancSystem has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Institutional & Insider Ownership

88.7% of First Interstate BancSystem shares are owned by institutional investors. 23.0% of Commercial National Financial shares are owned by insiders. Comparatively, 8.2% of First Interstate BancSystem shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for Commercial National Financial and First Interstate BancSystem, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Commercial National Financial	0	0	0	0	0.00
First Interstate BancSystem	1	3	4	0	2.38

First Interstate BancSystem has a consensus target price of $36.86, indicating a potential upside of 2.58%. Given First Interstate BancSystem’s stronger consensus rating and higher probable upside, analysts clearly believe First Interstate BancSystem is more favorable than Commercial National Financial.

Summary

First Interstate BancSystem beats Commercial National Financial on 13 of the 16 factors compared between the two stocks.

About Commercial National Financial

Commercial National Financial Corporation operates as the holding company for Commercial Bank that provides various banking products and services to individuals, agricultural businesses, commercial businesses, and light industries in Michigan. The company accepts various deposit products, including checking and savings accounts, individual retirement accounts, certificates of deposit, and health savings accounts. It also offers personal loan products, such as automobile loans, recreational vehicle loans, personal lines of credit, and unsecured term loans, as well as home equity loans and mortgage loans; and business loans, including secured lines of credit, business equity line of credit, SBA loans, equipment loans, real estate loans, vehicle loans, term loans, USDA loan programs, and capital access loan programs. In addition, the company provides other services comprising business VISA check cards, debit and ATM cards, business statement savings, business certificates of deposit, merchant services, night depository, telephone banking, online banking, e-statements, direct deposit of payroll for employees, child support payments, collection of receivables, and remote deposit capture, as well as treasury services. It provides its services through offices located in Barry, Gratiot, Ingham, Kent, and Montcalm counties in Michigan. The company was founded in 1893 and is headquartered in Ithaca, Michigan.

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. The company 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.