BANCORP 34 (OTCMKTS:BCTF) & First Financial Bankshares (NASDAQ:FFIN) Critical Review

First Financial Bankshares (NASDAQ:FFIN) and BANCORP 34 (OTCMKTS:BCTF) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares First Financial Bankshares and BANCORP 34’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial Bankshares	29.81%	14.16%	1.69%
BANCORP 34	11.27%	4.26%	0.40%

Earnings and Valuation

This table compares First Financial Bankshares and BANCORP 34″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial Bankshares	$600.34 million	7.47	$223.51 million	$1.69	18.55
BANCORP 34	$56.34 million	1.63	$1.69 million	$0.88	15.34

First Financial Bankshares has higher revenue and earnings than BANCORP 34. BANCORP 34 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.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for First Financial Bankshares and BANCORP 34, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Bankshares	0	3	1	0	2.25
BANCORP 34	0	0	0	0	0.00

First Financial Bankshares currently has a consensus price target of $38.00, indicating a potential upside of 21.21%. Given First Financial Bankshares’ stronger consensus rating and higher possible upside, equities research analysts plainly believe First Financial Bankshares is more favorable than BANCORP 34.

Insider and Institutional Ownership

69.8% of First Financial Bankshares shares are owned by institutional investors. Comparatively, 6.5% of BANCORP 34 shares are owned by institutional investors. 4.2% of First Financial Bankshares shares are owned by company insiders. Comparatively, 7.4% of BANCORP 34 shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

First Financial Bankshares has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, BANCORP 34 has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500.

Dividends

First Financial Bankshares pays an annual dividend of $0.76 per share and has a dividend yield of 2.4%. BANCORP 34 pays an annual dividend of $0.28 per share and has a dividend yield of 2.1%. First Financial Bankshares pays out 45.0% of its earnings in the form of a dividend. BANCORP 34 pays out 31.8% 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 increased its dividend for 15 consecutive years. First Financial Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

First Financial Bankshares beats BANCORP 34 on 15 of the 17 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 BANCORP 34

Bancorp 34, Inc. operates as the holding company for Bank 34 that offers various banking products and services to individuals and businesses in the United States. It accepts various deposit products, such as savings accounts, checking accounts, money market accounts, demand and time deposits, NOW accounts, and individual retirement accounts, as well as certificates of deposit. The company also provides term, working capital, construction, USDA, small business administration, equipment, assisted living and skilled nursing, renewable energy and solar equipment, and commercial real estate loans; and small to medium size business and business acquisitions financing; lines of credit; multi-family finance; and employee stock ownership plans, HOA lending, and investor pools of single family rentals. In addition, it offers credit and debit cards; safe deposit boxes; treasury management products; and merchant card processing, cash management, e-banking, mobile and online banking, bill payment, and merchant capture services. The company operates through its network of full-service branches in Scottsdale and Arizona, as well as Alamogordo and Las Cruces, New Mexico. Bancorp 34, Inc. was founded in 1934 and is headquartered in Scottsdale, Arizona.