Critical Review: First Financial Bankshares (NASDAQ:FFIN) & Red River Bancshares (NASDAQ:RRBI)

First Financial Bankshares (NASDAQ:FFIN) and Red River Bancshares (NASDAQ:RRBI) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

Valuation and Earnings

This table compares First Financial Bankshares and Red River Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial Bankshares	$833.20 million	5.22	$253.58 million	$1.77	17.14
Red River Bancshares	$169.85 million	3.46	$42.76 million	$6.39	13.98

First Financial Bankshares has higher revenue and earnings than Red River Bancshares. Red River Bancshares 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.

Dividends

First Financial Bankshares pays an annual dividend of $0.76 per share and has a dividend yield of 2.5%. Red River Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 0.7%. First Financial Bankshares pays out 42.9% of its earnings in the form of a dividend. Red River Bancshares pays out 9.4% 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 raised its dividend for 15 consecutive years and Red River Bancshares has raised its dividend for 3 consecutive years. First Financial Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

First Financial Bankshares has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Red River Bancshares has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500.

Institutional & Insider Ownership

69.8% of First Financial Bankshares shares are held by institutional investors. Comparatively, 27.6% of Red River Bancshares shares are held by institutional investors. 4.0% of First Financial Bankshares shares are held by insiders. Comparatively, 15.9% of Red River Bancshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Financial Bankshares	30.43%	14.16%	1.72%
Red River Bancshares	25.18%	12.58%	1.34%

Analyst Recommendations

This is a summary of current recommendations and price targets for First Financial Bankshares and Red River Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Bankshares	0	3	1	0	2.25
Red River Bancshares	0	0	2	1	3.33

First Financial Bankshares currently has a consensus price target of $38.00, indicating a potential upside of 25.25%. Red River Bancshares has a consensus price target of $67.00, indicating a potential downside of 24.99%. Given First Financial Bankshares’ higher possible upside, research analysts clearly believe First Financial Bankshares is more favorable than Red River Bancshares.

Summary

First Financial Bankshares beats Red River Bancshares on 12 of the 18 factors compared between the two stocks.

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.

About Red River Bancshares

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.