First Busey Corporation (NASDAQ: BUSE) and LegacyTexas Financial Group (NASDAQ:LTXB) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, dividends, analyst recommendations, risk, institutional ownership, earnings and valuation.

Valuation & Earnings

This table compares First Busey Corporation and LegacyTexas Financial Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Busey Corporation $248.52 million 5.78 $69.08 million $1.52 20.79
LegacyTexas Financial Group $307.99 million 5.90 $97.20 million $2.09 18.68

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

Risk and Volatility

First Busey Corporation has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, LegacyTexas Financial Group has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

Profitability

This table compares First Busey Corporation and LegacyTexas Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Busey Corporation 22.04% 10.59% 1.16%
LegacyTexas Financial Group 25.44% 10.94% 1.14%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for First Busey Corporation and LegacyTexas Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Busey Corporation 0 3 0 0 2.00
LegacyTexas Financial Group 0 2 4 0 2.67

First Busey Corporation presently has a consensus target price of $31.67, indicating a potential upside of 0.21%. LegacyTexas Financial Group has a consensus target price of $44.30, indicating a potential upside of 13.47%. Given LegacyTexas Financial Group’s stronger consensus rating and higher probable upside, analysts plainly believe LegacyTexas Financial Group is more favorable than First Busey Corporation.

Dividends

First Busey Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 2.3%. LegacyTexas Financial Group pays an annual dividend of $0.60 per share and has a dividend yield of 1.5%. First Busey Corporation pays out 47.4% of its earnings in the form of a dividend. LegacyTexas Financial Group pays out 28.7% 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.

Insider and Institutional Ownership

45.8% of First Busey Corporation shares are held by institutional investors. Comparatively, 82.3% of LegacyTexas Financial Group shares are held by institutional investors. 9.6% of First Busey Corporation shares are held by company insiders. Comparatively, 3.3% of LegacyTexas Financial Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

LegacyTexas Financial Group beats First Busey Corporation on 12 of the 16 factors compared between the two stocks.

First Busey Corporation Company Profile

First Busey Corporation (First Busey) is a financial holding company. The Company offers a range of financial services through its banking and non-banking subsidiaries. The Company operates through three segments: Banking, Remittance Processing and Wealth Management. The Banking segment provides a range of banking services to individual and corporate customers through its branch network in downstate Illinois, St. Louis, Missouri metropolitan area, southwest Florida and through its branch in Indianapolis, Indiana. The Remittance Processing segment provides for online bill payments, lockbox and walk-in payments. The Wealth Management segment provides a range of asset management, investment and fiduciary services to individuals, businesses and foundations, philanthropic advisory services and farm and brokerage services. The Company conducts the business of banking and related services through Busey Bank. The Company’s subsidiaries also include First Community Financial Bank.

LegacyTexas Financial Group Company Profile

LegacyTexas Financial Group, Inc. is a bank holding company. LegacyTexas Bank (the Bank) is the Company’s principal operating subsidiary, which is a commercial bank that is focused on meeting the needs of businesses and consumers in the North Texas area. Its principal business consists of attracting retail deposits from general public and business community and investing those funds, along with borrowed funds, in commercial real estate loans, secured and unsecured commercial and industrial loans, as well as permanent loans secured by first and second mortgages on one- to four-family residences and consumer loans. Its Warehouse Purchase Program allows mortgage banking company customers to close one- to four-family real estate loans in their own name and manage its cash flow needs until the loans are sold to investors. It offers title services, as well as brokerage services for purchase and sale of non-deposit investment and insurance products through a third-party brokerage arrangement.

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