First BanCorp. (NYSE:FBP) versus Chemung Financial (NASDAQ:CHMG) Critical Analysis

Chemung Financial (NASDAQ:CHMG) and First BanCorp. (NYSE:FBP) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Volatility & Risk

Chemung Financial has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, First BanCorp. has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.

Dividends

Chemung Financial pays an annual dividend of $1.36 per share and has a dividend yield of 2.4%. First BanCorp. pays an annual dividend of $0.72 per share and has a dividend yield of 3.4%. Chemung Financial pays out 49.1% of its earnings in the form of a dividend. First BanCorp. pays out 35.0% 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. Chemung Financial has raised its dividend for 1 consecutive years and First BanCorp. has raised its dividend for 6 consecutive years. First BanCorp. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Chemung Financial and First BanCorp.”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chemung Financial	$150.79 million	1.77	$23.67 million	$2.77	20.14
First BanCorp.	$944.84 million	3.51	$298.72 million	$2.06	10.21

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

Institutional & Insider Ownership

47.5% of Chemung Financial shares are owned by institutional investors. Comparatively, 97.9% of First BanCorp. shares are owned by institutional investors. 12.0% of Chemung Financial shares are owned by company insiders. Comparatively, 2.3% of First BanCorp. 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.

Profitability

This table compares Chemung Financial and First BanCorp.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chemung Financial	9.58%	11.28%	0.94%
First BanCorp.	26.73%	17.45%	1.64%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Chemung Financial and First BanCorp., as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chemung Financial	1	3	0	0	1.75
First BanCorp.	0	1	3	0	2.75

Chemung Financial currently has a consensus price target of $54.50, suggesting a potential downside of 2.33%. First BanCorp. has a consensus price target of $24.00, suggesting a potential upside of 14.15%. Given First BanCorp.’s stronger consensus rating and higher probable upside, analysts clearly believe First BanCorp. is more favorable than Chemung Financial.

Summary

First BanCorp. beats Chemung Financial on 14 of the 17 factors compared between the two stocks.

About Chemung Financial

Chemung Financial Corporation operates as a bank holding company for Chemung Canal Trust Company that provides a range of banking, financing, fiduciary, and other financial services. The company provides demand, savings, and time deposits; non-interest and interest-bearing checking accounts; and insured money market accounts. It also offers commercial and agricultural loans comprising loans to small to mid-sized businesses; commercial and residential mortgage loans; and consumer loans, including home equity lines of credit and home equity term loans. In addition, the company provides interest rate swaps, letters of credit, employee benefit plans, insurance products, mutual fund, brokerage, and tax preparation services. Further, it offers guardian, custodian, trustee, investment, pension, estate planning, and employee benefit administrative services, as well as acts as an agent for pension, profit-sharing, and other employee benefit trusts. Chemung Financial Corporation was founded in 1833 and is headquartered in Elmira, New York.

About First BanCorp.

First BanCorp. operates as a bank holding company for FirstBank Puerto Rico that provides a range of financial products and services to consumers and commercial customers. The company operates through six segments: Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans, as well as other products, such as cash management and business management services. The Mortgage Banking segment engages in the origination, sale, and servicing of various residential mortgage loans; hedging activities; and purchase of mortgage loans from branch and mortgage bankers. The Consumer (Retail) Banking segment provides auto loans, finance leases, boat and personal loans, credit card loans, and lines of credit; and interest-bearing and non-interest-bearing checking and savings accounts, and individual retirement accounts and retail certificates of deposit (CDs), as well as insurance agency services. The Treasury and Investments segment offers funding and liquidity management services. The United States Operations segment provides checking, savings, and money market accounts, as well as retail CDs; traditional commercial and industrial, and commercial real estate loans, residential mortgages, term and construction loan, home equity loans, lines of credit, FHLB advances, and brokered CDs; and internet banking, cash management, remote deposit capture, and automated clearing house transactions services. The Virgin Islands Operations segment is involved in consumer, commercial lending, and deposit-taking activities. First BanCorp. was founded in 1948 and is headquartered in San Juan, Puerto Rico.