Head to Head Analysis: First Interstate BancSystem (NASDAQ:FIBK) and Ames National (NASDAQ:ATLO)

First Interstate BancSystem (NASDAQ:FIBK) and Ames National (NASDAQ:ATLO) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Institutional & Insider Ownership

88.7% of First Interstate BancSystem shares are owned by institutional investors. Comparatively, 26.5% of Ames National shares are owned by institutional investors. 8.2% of First Interstate BancSystem shares are owned by company insiders. Comparatively, 2.1% of Ames National shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 5.9%. Ames National pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. First Interstate BancSystem pays out 84.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ames National pays out 51.9% of its earnings in the form of a dividend.

Profitability

This table compares First Interstate BancSystem and Ames National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Interstate BancSystem	16.04%	6.82%	0.80%
Ames National	14.44%	7.46%	0.64%

Valuation & Earnings

This table compares First Interstate BancSystem and Ames National”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Interstate BancSystem	$1.48 billion	2.25	$226.00 million	$2.22	14.30
Ames National	$92.44 million	1.94	$10.22 million	$1.54	13.05

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for First Interstate BancSystem and Ames National, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Interstate BancSystem	1	2	3	0	2.33
Ames National	0	0	0	0	0.00

First Interstate BancSystem presently has a consensus target price of $35.14, indicating a potential upside of 10.69%. Given First Interstate BancSystem’s stronger consensus rating and higher possible upside, equities analysts plainly believe First Interstate BancSystem is more favorable than Ames National.

Risk & Volatility

First Interstate BancSystem has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, Ames National has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500.

Summary

First Interstate BancSystem beats Ames National on 14 of the 16 factors compared between the two stocks.

About First Interstate BancSystem

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides range of banking products and services in the United States. It offers various traditional depository products, including checking, savings, and time deposits; and repurchase agreements primarily for commercial and municipal depositors. The company also offers real estate loans comprising commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans comprising direct personal loans, credit card loans and lines of credit, and indirect loans; variable and fixed rate commercial loans for small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions; and agricultural loans. In addition, it provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. Further, the company offers marketing, credit review, loan servicing, credit cards issuance and servicing, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, other operational, and specialized staff support services, as well as online and mobile banking services. The company serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, governmental services, healthcare, hospitality, housing, professional services, real estate development, retail, technology, tourism, and wholesale trade. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.

About Ames National

Ames National Corporation operates as a multi-bank holding company that provides banking products and services primarily in Boone, Clarke, Hancock, Marshall, Polk, Story, and Union counties in central, north central, and south-central Iowa. The company accepts various deposit products, including checking and savings accounts; and time deposits, such as money market accounts and certificates of deposit. It also provides loans, such as short-term and medium-term commercial and agricultural real estate, residential real estate loans, equipment, vehicle, and home improvement loans; consumer loans to finance consumer purchases, such as automobiles, trucks, recreational vehicles, household furnishings, boats, personal loans, and lines of credit; agricultural and business operating loans and lines of credit; and originates mortgage loans for sale into the secondary market. In addition, the company offers cash management, merchant credit card processing, safe deposit box, wire transfer, direct deposit, and automated/video teller machine access services; and automatic drafts for various accounts, as well as wealth management services. Further, it provides farm management, investment, and custodial services for individuals, businesses, and non-profit organizations; and online, mobile, and private banking services. Ames National Corporation was incorporated in 1903 and is headquartered in Ames, Iowa.