Critical Analysis: National Bank of Canada (OTCMKTS:NTIOF) and First Financial Corporation Indiana (NASDAQ:THFF)

First Financial Corporation Indiana (NASDAQ:THFF) and National Bank of Canada (OTCMKTS:NTIOF) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Analyst Ratings

This is a breakdown of recent recommendations for First Financial Corporation Indiana and National Bank of Canada, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Corporation Indiana	0	4	0	1	2.40
National Bank of Canada	0	5	3	0	2.38

First Financial Corporation Indiana currently has a consensus price target of $88.00, suggesting a potential upside of 16.46%. Given First Financial Corporation Indiana’s stronger consensus rating and higher possible upside, equities research analysts plainly believe First Financial Corporation Indiana is more favorable than National Bank of Canada.

Profitability

This table compares First Financial Corporation Indiana and National Bank of Canada’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial Corporation Indiana	23.32%	13.02%	1.43%
National Bank of Canada	17.22%	16.67%	0.85%

Insider and Institutional Ownership

72.7% of First Financial Corporation Indiana shares are held by institutional investors. Comparatively, 0.1% of National Bank of Canada shares are held by institutional investors. 5.0% of First Financial Corporation Indiana shares are held by insiders. Comparatively, 0.3% of National Bank of Canada shares are held 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.

Valuation & Earnings

This table compares First Financial Corporation Indiana and National Bank of Canada”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial Corporation Indiana	$276.32 million	3.25	$79.21 million	$7.14	10.58
National Bank of Canada	$21.96 billion	2.62	$2.87 billion	$8.63	17.39

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

Risk and Volatility

First Financial Corporation Indiana has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, National Bank of Canada has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.

Dividends

First Financial Corporation Indiana pays an annual dividend of $2.24 per share and has a dividend yield of 3.0%. National Bank of Canada pays an annual dividend of $3.81 per share and has a dividend yield of 2.5%. First Financial Corporation Indiana pays out 31.4% of its earnings in the form of a dividend. National Bank of Canada pays out 44.1% 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 Corporation Indiana has increased its dividend for 2 consecutive years. First Financial Corporation Indiana is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

First Financial Corporation Indiana beats National Bank of Canada on 11 of the 18 factors compared between the two stocks.

About First Financial Corporation Indiana

First Financial Corporation, through its subsidiaries, provides various financial services. The company offers non-interest-bearing demand, interest-bearing demand, savings, time, and other time deposits. It also provides commercial loans primarily to expand a business or finance asset purchases; residential real estate and residential real estate construction loans; and home equity loans and lines, secured loans, and cash/CD secured and unsecured loans. In addition, the company offers lease financing, trust account, depositor, and insurance services. The company was founded in 1834 and is headquartered in Terre Haute, Indiana.

About National Bank of Canada

National Bank of Canada provides financial services to individuals, businesses, institutional clients, and governments in Canada and internationally. It operates through four segments: Personal and Commercial, Wealth Management, Financial Markets, and U.S. Specialty Finance and International. The Personal and Commercial segment offers personal banking services, including transaction solutions, mortgage loans and home equity lines of credit, consumer loans, payment solutions, and savings and investment solutions; various insurance products; and commercial banking services, such as credit, and deposit, investment solutions, international trade, foreign exchange transactions, payroll, cash management, insurance, electronic transactions, and complimentary services. The Wealth Management segment provides full-service brokerage, private banking, direct brokerage, investment solutions, administrative and trade execution, transaction products, and trust and estate services. The Financial Markets segment offers corporate banking, advisory, and capital markets services; and project financing, debt, and equity underwriting; advisory services in the areas of mergers and acquisitions, and financing. The U.S. Specialty Finance and International segment provides specialty finance products; and personal and commercial banking in Cambodia. National Bank of Canada was founded in 1859 and is headquartered in Montreal, Canada.