Critical Contrast: First Foundation (NASDAQ:FFWM) versus Banco Bradesco (NYSE:BBDO)

Banco Bradesco (NYSE:BBDO) and First Foundation (NASDAQ:FFWM) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.

Earnings and Valuation

This table compares Banco Bradesco and First Foundation”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Bradesco	$39.41 billion	N/A	$2.85 billion	$0.26	7.56
First Foundation	$623.04 million	1.02	-$199.06 million	($1.12)	-6.88

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

Analyst Recommendations

This is a summary of current recommendations for Banco Bradesco and First Foundation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Bradesco	0	0	0	0	0.00
First Foundation	0	4	1	0	2.20

First Foundation has a consensus price target of $7.80, suggesting a potential upside of 1.17%. Given First Foundation’s stronger consensus rating and higher possible upside, analysts clearly believe First Foundation is more favorable than Banco Bradesco.

Risk & Volatility

Banco Bradesco has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, First Foundation has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Dividends

Banco Bradesco pays an annual dividend of $0.03 per share and has a dividend yield of 1.5%. First Foundation pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Banco Bradesco pays out 11.5% of its earnings in the form of a dividend. First Foundation pays out -3.6% 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.

Profitability

This table compares Banco Bradesco and First Foundation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Bradesco	7.43%	10.17%	0.86%
First Foundation	-11.52%	1.06%	0.07%

Institutional and Insider Ownership

73.1% of First Foundation shares are owned by institutional investors. 0.3% of Banco Bradesco shares are owned by insiders. Comparatively, 7.1% of First Foundation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Banco Bradesco beats First Foundation on 8 of the 15 factors compared between the two stocks.

About Banco Bradesco

Banco Bradesco S.A., together with its subsidiaries, provides various banking products and services to individuals, corporates, and businesses in Brazil and internationally. The company operates through two segments, Banking and Insurance. It provides current, savings, click, and salary accounts; real estate credit, vehicle financing, payroll loans, mortgage loans, microcredit, leasing, and personal and installment credit; overdraft and agribusiness loans; debit and business cards; financial and security services; consortium products; car, personal accident, dental, travel, and life insurance; investment products; pension products; foreign currency exchange services; capitalization bonds; and internet banking services. Banco Bradesco S.A. was founded in 1943 and is headquartered in Osasco, Brazil.

About First Foundation

First Foundation Inc., through its subsidiaries, provides banking services, investment advisory, wealth management, and trust services to individuals, businesses, and other organizations in the United States. The company operates in two segments, Banking and Wealth Management. It offers a range of deposit products, including personal and business checking accounts, savings accounts, interest-bearing demand deposit accounts, money market accounts, and time certificate of deposits; and loan products consisting of multifamily and single family residential real estate loans, commercial real estate loans, commercial term loans, and line of credits, as well as consumer loans, such as personal installment loans and line of credits, and home equity line of credits. The company also provides various specialized services comprising trust services, online and mobile banking, remote deposit capture services, merchant credit card services, ATM cards, Visa debit cards, and business sweep accounts, as well as insurance brokerage services and equipment financing solutions. In addition, it offers investment management and financial planning services; financial, investment, and economic advisory and related services; and treasury management services, such as bill pay, check/payee/ACH positive pay, wire origination, internal and external transfers, account reconciliation reporting, mobile deposit, lockbox, cash vault services and merchant processing. Further, the company provides support services, including the processing and transmission of financial and economic data for charitable organizations. It operates through a network of branch offices and loan production offices. The company was founded in 1985 and is headquartered in Dallas, Texas.