Head-To-Head Review: 1st Source (NASDAQ:SRCE) versus First Busey (NASDAQ:BUSE)

First Busey (NASDAQ:BUSE) and 1st Source (NASDAQ:SRCE) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, dividends, risk, profitability and institutional ownership.

Profitability

This table compares First Busey and 1st Source’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Busey	11.00%	9.56%	1.13%
1st Source	24.97%	12.25%	1.68%

Institutional and Insider Ownership

56.5% of First Busey shares are owned by institutional investors. Comparatively, 74.4% of 1st Source shares are owned by institutional investors. 3.9% of First Busey shares are owned by insiders. Comparatively, 19.5% of 1st Source shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

First Busey pays an annual dividend of $1.00 per share and has a dividend yield of 4.3%. 1st Source pays an annual dividend of $1.60 per share and has a dividend yield of 2.6%. First Busey pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 1st Source pays out 26.6% of its earnings in the form of a dividend. First Busey has raised its dividend for 10 consecutive years and 1st Source has raised its dividend for 38 consecutive years.

Volatility and Risk

First Busey has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, 1st Source has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for First Busey and 1st Source, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Busey	0	4	3	0	2.43
1st Source	0	3	2	0	2.40

First Busey currently has a consensus price target of $26.33, suggesting a potential upside of 14.44%. 1st Source has a consensus price target of $72.67, suggesting a potential upside of 18.00%. Given 1st Source’s higher probable upside, analysts plainly believe 1st Source is more favorable than First Busey.

Valuation & Earnings

This table compares First Busey and 1st Source”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Busey	$636.13 million	3.20	$113.69 million	$1.15	20.01
1st Source	$420.79 million	3.58	$132.62 million	$6.01	10.25

1st Source has lower revenue, but higher earnings than First Busey. 1st Source is trading at a lower price-to-earnings ratio than First Busey, indicating that it is currently the more affordable of the two stocks.

Summary

1st Source beats First Busey on 11 of the 17 factors compared between the two stocks.

About First Busey

First Busey Corporation operates as the bank holding company for Busey Bank that engages in the provision of retail and commercial banking products and services to individual, corporate, institutional, and governmental customers in the United States. It operates through three segments: Banking, Wealth Management, and FirsTech. The Banking segment provides banking services to individual customers, such as demand and savings deposits, money transfers, safe deposit services, individual retirement accounts and other fiduciary services, automated teller machines, and technology-based networks, as well as loan products, including residential real estate, home equity lines of credit, and consumer loans. This segment also offers banking services to corporate customers, including commercial, commercial real estate, real estate construction, and agricultural loans, as well as cash management services. The Wealth Management segment offers a range of investment and asset management, investment, brokerage, investment strategy consulting, fiduciary, philanthropic advisory, tax preparation, business succession planning, and employee retirement plan services to individuals, businesses, and foundations; and professional farm management services to the agricultural industry. The FirsTech segment provides payment technology solutions comprising online, mobile, and voice-recognition bill payments; money management and credit card networks; direct debit services; lockbox remittance processing for payments made by mail; and walk-in payments, as well as tools to help clients with billing, reconciliation, bill reminders, and treasury services. The company was founded in 1868 and is headquartered in Champaign, Illinois.

About 1st Source

1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and wealth advisory services, and insurance products to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate mortgage loans, and home equity lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for construction equipment, new and pre-owned aircraft, auto and light trucks, and medium and heavy duty trucks; and finances construction equipment, aircrafts, medium and heavy duty trucks, step vans, vocational work trucks, motor coaches, shuttle buses, funeral cars, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.