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

Dividends

Flushing Financial pays an annual dividend of $0.72 per share and has a dividend yield of 2.5%. First Busey pays an annual dividend of $0.72 per share and has a dividend yield of 2.3%. Flushing Financial pays out 42.1% of its earnings in the form of a dividend. First Busey pays out 47.4% 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. Flushing Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current recommendations for Flushing Financial and First Busey, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flushing Financial 0 3 0 0 2.00
First Busey 0 3 0 0 2.00

Flushing Financial presently has a consensus target price of $29.67, suggesting a potential upside of 5.01%. First Busey has a consensus target price of $33.00, suggesting a potential upside of 3.97%. Given Flushing Financial’s higher possible upside, research analysts plainly believe Flushing Financial is more favorable than First Busey.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Flushing Financial $278.53 million 2.92 $64.91 million $1.71 16.52
First Busey $240.06 million 6.43 $49.69 million $1.52 20.88

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

Institutional and Insider Ownership

77.4% of Flushing Financial shares are held by institutional investors. Comparatively, 46.1% of First Busey shares are held by institutional investors. 4.9% of Flushing Financial shares are held by company insiders. Comparatively, 9.6% of First Busey shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Flushing Financial 19.50% 9.04% 0.77%
First Busey 22.02% 10.42% 1.18%

Volatility and Risk

Flushing Financial has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, First Busey has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.

Summary

Flushing Financial beats First Busey on 8 of the 14 factors compared between the two stocks.

Flushing Financial Company Profile

Flushing Financial Corporation is the bank holding company for Flushing Bank (the Bank). The Company is a community-oriented financial institution offering a range of financial services. The Bank’s subsidiaries include Flushing Preferred Funding Corporation, Flushing Service Corporation and FSB Properties Inc. The Company also owns Flushing Financial Capital Trust II, Flushing Financial Capital Trust III and Flushing Financial Capital Trust IV (the Trusts). As of December 31, 2016, the Bank operated 19 full-service offices, which were located in the New York City Boroughs of Queens, Brooklyn, and Manhattan, and in Nassau County, New York. The Company also operates an Internet branch, iGObanking.com. The Bank has a business banking unit, which focuses on the development of a full complement of commercial business deposit, loan and cash management products.

First Busey 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.

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