First Financial Bancorp. (NASDAQ:FFBC) and Provident Financial Services (NYSE:PFS) Critical Review

First Financial Bancorp. (NASDAQ:FFBC) and Provident Financial Services (NYSE:PFS) are both mid-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, dividends, profitability, earnings and risk.

Volatility and Risk

First Financial Bancorp. has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500. Comparatively, Provident Financial Services has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for First Financial Bancorp. and Provident Financial Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Bancorp.	0	4	4	0	2.50
Provident Financial Services	0	3	4	1	2.75

First Financial Bancorp. currently has a consensus target price of $33.67, suggesting a potential upside of 4.62%. Provident Financial Services has a consensus target price of $26.79, suggesting a potential upside of 15.71%. Given Provident Financial Services’ stronger consensus rating and higher possible upside, analysts clearly believe Provident Financial Services is more favorable than First Financial Bancorp..

Insider and Institutional Ownership

77.2% of First Financial Bancorp. shares are owned by institutional investors. Comparatively, 72.0% of Provident Financial Services shares are owned by institutional investors. 1.1% of First Financial Bancorp. shares are owned by company insiders. Comparatively, 3.0% of Provident Financial Services shares are owned by company 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 Financial Bancorp. pays an annual dividend of $1.04 per share and has a dividend yield of 3.2%. Provident Financial Services pays an annual dividend of $0.96 per share and has a dividend yield of 4.1%. First Financial Bancorp. pays out 36.7% of its earnings in the form of a dividend. Provident Financial Services pays out 40.0% 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 Financial Bancorp. has increased its dividend for 1 consecutive years.

Valuation & Earnings

This table compares First Financial Bancorp. and Provident Financial Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial Bancorp.	$1.26 billion	2.68	$255.60 million	$2.83	11.37
Provident Financial Services	$1.38 billion	2.18	$291.16 million	$2.40	9.65

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

Profitability

This table compares First Financial Bancorp. and Provident Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial Bancorp.	20.77%	11.13%	1.49%
Provident Financial Services	22.15%	11.00%	1.24%

Summary

First Financial Bancorp. beats Provident Financial Services on 9 of the 17 factors compared between the two stocks.

About First Financial Bancorp.

First Financial Bancorp. operates as the bank holding company for First Financial Bank that provides commercial banking and related services to individuals and businesses in Ohio, Indiana, Kentucky, and Illinois. The company offers checking, savings, and money-market accounts; and accepts various deposit products, such as interest-bearing and non-interest-bearing accounts, time deposits, and cash management services for commercial customers. It also provides real estate loans secured by residential property, such as one to four family residential housing units or commercial property comprising owner-occupied and/or investor income producing real estate consisting of apartments, shopping centers, and office buildings; commercial and industrial loans for various purposes, including inventory, receivables, and equipment, as well as equipment and leasehold improvement financing for franchisees; consumer loans comprising new and used vehicle loans, second mortgages on residential real estate, and unsecured loans; and home equity lines of credit. In addition, the company offers commercial financing to the insurance industry, registered investment advisors, certified public accountants, indirect auto finance companies, and restaurant franchisees. Further, it provides a range of trust and wealth management services; lease and equipment financing services; and currency payments, foreign exchange hedging, and other advisory products. First Financial Bancorp. was founded in 1863 and is headquartered in Cincinnati, Ohio.

About Provident Financial Services

Provident Financial Services, Inc. operates as the bank holding company for Provident Bank that provides various banking products and services to individuals, families, and businesses in the United States. Its deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA products. The company's loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, retail and industrial properties, and office buildings; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, personal loans and unsecured lines of credit, and auto and recreational vehicle loans. It also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, the company provides wealth management services comprising investment management, trust and estate administration, financial planning, and tax compliance and planning. Further, it sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure. The company was founded in 1839 and is headquartered in Jersey City, New Jersey.