First United (NASDAQ:FUNC – Get Free Report) and Popular (NASDAQ:BPOP – Get Free Report) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, analyst recommendations, valuation, institutional ownership and profitability.
Insider & Institutional Ownership
33.3% of First United shares are held by institutional investors. Comparatively, 87.3% of Popular shares are held by institutional investors. 8.1% of First United shares are held by company insiders. Comparatively, 2.1% of Popular shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Dividends
First United pays an annual dividend of $1.04 per share and has a dividend yield of 2.4%. Popular pays an annual dividend of $3.00 per share and has a dividend yield of 1.8%. First United pays out 26.9% of its earnings in the form of a dividend. Popular pays out 20.3% 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 United has increased its dividend for 6 consecutive years and Popular has increased its dividend for 6 consecutive years.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| First United | 0 | 0 | 3 | 0 | 3.00 |
| Popular | 0 | 0 | 10 | 3 | 3.23 |
First United presently has a consensus target price of $49.50, indicating a potential upside of 13.35%. Popular has a consensus target price of $187.08, indicating a potential upside of 13.49%. Given Popular’s stronger consensus rating and higher probable upside, analysts plainly believe Popular is more favorable than First United.
Profitability
This table compares First United and Popular’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| First United | 20.05% | 13.69% | 1.36% |
| Popular | 21.37% | 15.34% | 1.26% |
Earnings and Valuation
This table compares First United and Popular”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| First United | $93.45 million | 3.02 | $24.51 million | $3.86 | 11.31 |
| Popular | $4.44 billion | 2.37 | $833.16 million | $14.80 | 11.14 |
Popular has higher revenue and earnings than First United. Popular is trading at a lower price-to-earnings ratio than First United, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
First United has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, Popular has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.
Summary
Popular beats First United on 12 of the 17 factors compared between the two stocks.
About First United
First United Corporation operates as the bank holding company for First United Bank & Trust that provides various retail and commercial banking services to businesses and individuals. It offers various deposit products, which includes checking, savings, money market deposit, and regular and individual retirement accounts (IRAs), as well as certificates of deposit. The company loan portfolio includes commercial loans secured by real estate, commercial equipment, vehicles, or other assets of the borrower; commercial real estate loans for residential and commercial development, agricultural purpose properties, and service industry buildings, such as restaurants and motels, retail buildings, and general purpose business space; residential mortgage loans; home equity lines of credit; residential real estate construction loans; and indirect and direct auto loans, student loans, and other secured and unsecured lines of credit and term loans. It also offers access to multi-million-dollar certificates of deposit and the Intrafi cash service, including multi-million-dollar savings and demand deposits to municipalities, businesses, and consumers; and treasury management, cash sweep, and various checking services. In addition, the company provides trust services, which includes personal trust, investment agency accounts, charitable trusts, retirement accounts, including IRA roll-overs, 401(k) accounts and defined benefit plans, estate administration, and estate planning; and insurance products, brokerage services, and safe deposit and night depository facilities. First United Corporation was founded in 1900 and is headquartered in Oakland, Maryland.
About Popular
Popular, Inc., through its subsidiaries, provides various retail, mortgage, and commercial banking products and services in Puerto Rico, the United States, and the British Virgin Islands. The company provides savings, NOW, money market, and other interest-bearing demand accounts; non-interest bearing demand deposits; and certificates of deposit. It also offers commercial and industrial, commercial multi-family, commercial real estate, and residential mortgage loans; consumer loans, including personal loans, credit cards, automobile loans, home equity lines of credit, and other loans to individual borrowers; construction loans; and lease financing comprising automobile loans/leases. In addition, the company provides investment banking, auto and equipment leasing and financing, broker-dealer, and insurance services; debit cards; and online banking services. Popular, Inc. was founded in 1893 and is headquartered in Hato Rey, Puerto Rico.
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