PacWest Bancorp (NASDAQ:PACW – Get Rating) and First Bancshares (NASDAQ:FBMS – Get Rating) 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, earnings, analyst recommendations, valuation, profitability and risk.
Insider & Institutional Ownership
88.7% of PacWest Bancorp shares are owned by institutional investors. Comparatively, 65.2% of First Bancshares shares are owned by institutional investors. 1.3% of PacWest Bancorp shares are owned by company insiders. Comparatively, 4.7% of First Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a summary of recent ratings and target prices for PacWest Bancorp and First Bancshares, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
PacWest Bancorp currently has a consensus price target of $53.83, indicating a potential upside of 71.23%. First Bancshares has a consensus price target of $4.00, indicating a potential downside of 86.78%. Given PacWest Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe PacWest Bancorp is more favorable than First Bancshares.
Valuation & Earnings
This table compares PacWest Bancorp and First Bancshares’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|PacWest Bancorp||$1.35 billion||2.73||$606.96 million||$4.84||6.50|
|First Bancshares||$214.22 million||3.07||$64.17 million||$3.06||9.89|
PacWest Bancorp has higher revenue and earnings than First Bancshares. PacWest Bancorp is trading at a lower price-to-earnings ratio than First Bancshares, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
PacWest Bancorp has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, First Bancshares has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.
This table compares PacWest Bancorp and First Bancshares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
PacWest Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 3.2%. First Bancshares pays an annual dividend of $0.72 per share and has a dividend yield of 2.4%. PacWest Bancorp pays out 20.7% of its earnings in the form of a dividend. First Bancshares pays out 23.5% 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 Bancshares has increased its dividend for 5 consecutive years. PacWest Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.
PacWest Bancorp beats First Bancshares on 14 of the 18 factors compared between the two stocks.
PacWest Bancorp Company Profile (Get Rating)
PacWest Bancorp operates as the bank holding company for Pacific Western Bank that provides various banking products and services. The company accepts demand, money market, and time deposits. It also provides real estate loans to professional developers and real estate investors for the acquisition, refinancing, renovation, and construction of commercial real estate properties; small business administration loans; asset-based loans for working capital needs; venture capital loans to support the operations of entrepreneurial and venture-backed companies; and equipment-secured loans and leases. In addition, the company offers consumer loans comprising personal loans, auto loans, home equity lines of credit, revolving lines of credit, and other loans. Further, it provides international banking and multi-state deposit services; money market sweep products; investment advisory and asset management services; treasury and cash management services; telephone banking, remote deposit, and online and mobile banking services; and automated teller machine services. The company offers its products and services to small and mid-sized companies, venture capital and private equity investors, professionals, and other individuals. As of February 1, 2022, it operated through 69 full-service branches located in California; one branch located in Durham, North Carolina; one branch located in Denver, Colorado; and various loan production offices. The company was formerly known as First Community Bancorp and changed its name to PacWest Bancorp in April 2008. PacWest Bancorp was founded in 1999 and is headquartered in Beverly Hills, California.
First Bancshares Company Profile (Get Rating)
The First Bancshares, Inc. operates as the bank holding company for The First, A National Banking Association that provides general commercial and retail banking services. The company operates through three segments: Commercial/Retail Bank, Mortgage Banking Division, and Holding Company. It offers deposit services, including checking, NOW, and savings accounts; other time deposits, such as daily money market accounts and longer-term certificates of deposit; and individual retirement and health savings accounts. The company also provides commercial loans comprising secured and unsecured loans for working capital, business expansion, and purchase of equipment and machinery; consumer loans consisting of equity lines of credit, as well as secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; and real estate construction and acquisition loans. In addition, it originates loans to purchase existing residential homes or construct new homes, and to refinance existing mortgages; and provides financial and wealth management services. Further, the company offers internet banking services, automated teller machines, voice response telephone inquiry services, commercial sweep accounts, cash management services, safe deposit boxes, merchant, mobile deposit, direct deposit of payroll and social security checks, automatic drafts for various accounts, and credit card services. It primarily serves small to medium-sized businesses, professional concerns, individuals, associations, organizations, and governmental authorities. As of December 31, 2021, the company operated 90 locations in Mississippi, Alabama, Florida, Georgia, and Louisiana. The First Bancshares, Inc. was incorporated in 1995 and is headquartered in Hattiesburg, Mississippi.
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