Zions Bancorporation NA (NASDAQ:ZION) and First Commonwealth Financial (NYSE:FCF) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Profitability

This table compares Zions Bancorporation NA and First Commonwealth Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zions Bancorporation NA 27.58% 12.24% 1.27%
First Commonwealth Financial 27.84% 11.25% 1.41%

Earnings & Valuation

This table compares Zions Bancorporation NA and First Commonwealth Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zions Bancorporation NA $3.03 billion 2.70 $884.00 million $4.08 11.00
First Commonwealth Financial $380.89 million 3.34 $107.50 million $1.10 11.74

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

Institutional & Insider Ownership

95.2% of Zions Bancorporation NA shares are held by institutional investors. Comparatively, 66.6% of First Commonwealth Financial shares are held by institutional investors. 1.7% of Zions Bancorporation NA shares are held by insiders. Comparatively, 1.5% of First Commonwealth Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Zions Bancorporation NA has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, First Commonwealth Financial has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Zions Bancorporation NA and First Commonwealth Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zions Bancorporation NA 0 6 9 0 2.60
First Commonwealth Financial 0 3 2 0 2.40

Zions Bancorporation NA presently has a consensus price target of $55.71, indicating a potential upside of 24.14%. First Commonwealth Financial has a consensus price target of $16.50, indicating a potential upside of 27.81%. Given First Commonwealth Financial’s higher possible upside, analysts plainly believe First Commonwealth Financial is more favorable than Zions Bancorporation NA.

Dividends

Zions Bancorporation NA pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. First Commonwealth Financial pays an annual dividend of $0.40 per share and has a dividend yield of 3.1%. Zions Bancorporation NA pays out 29.4% of its earnings in the form of a dividend. First Commonwealth Financial pays out 36.4% 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. Zions Bancorporation NA has increased its dividend for 6 consecutive years and First Commonwealth Financial has increased its dividend for 2 consecutive years.

Summary

Zions Bancorporation NA beats First Commonwealth Financial on 11 of the 17 factors compared between the two stocks.

About Zions Bancorporation NA

Zions Bancorporation, National Association provides various banking and related services primarily in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. The company offers community banking services, such as small and medium-sized business and corporate banking; commercial and residential development, construction, and term lending; retail banking; treasury cash management and related products and services; residential mortgage servicing and lending services; trust and wealth management services; capital markets services, including municipal finance advisory and underwriting; and investment services. It also offers personal banking services to individuals, including home mortgages, bankcards, other installment loans, home equity lines of credit, checking accounts, savings accounts, certificates of deposit of various types and maturities, trust services, safe deposit facilities, and Internet and mobile banking services. In addition, the company provides self-directed brokerage services; small business administration lending and secondary market agricultural real estate mortgage loans; corporate trust services for municipalities; and bond transfer, stock transfer, and escrow services. As of December 31, 2018, it operated 433 branches. The company was formerly known as ZB, National Association and changed its name to Zions Bancorporation, National Association in September 2018. Zions Bancorporation, National Association was founded in 1873 and is headquartered in Salt Lake City, Utah.

About First Commonwealth Financial

First Commonwealth Financial Corporation, through its subsidiaries, provides consumer and commercial banking services to individuals, and small and mid-sized businesses in the United States. Its consumer services include personal checking accounts, interest-earning checking accounts, savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection, IRA accounts, and automated teller machine (ATM) services, as well as Internet, mobile, and telephone banking services. The company's commercial banking services comprise commercial lending, business checking accounts, online account management services, payroll direct deposits, commercial cash management services, and repurchase agreements, as well as ACH origination services. It also offers various trust and asset management services; auto, home, and business insurance, as well as term life insurance; and annuities, mutual funds, and stock and bond brokerage services through a broker-dealer and insurance brokers. As of March 4, 2019, the company operated 137 community banking offices in western and central Pennsylvania, as well as northeastern, central, and southwestern Ohio. It also leases 3 mortgage loan production offices and 3 corporate loan production offices, as well as operates a network of 150 automated teller machines. First Commonwealth Financial Corporation was founded in 1934 and is headquartered in Indiana, Pennsylvania.

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