Reviewing BancFirst (NASDAQ:BANF) and International Bancshares (NASDAQ:IBOC)

International Bancshares (NASDAQ:IBOC) and BancFirst (NASDAQ:BANF) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Profitability

This table compares International Bancshares and BancFirst’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
International Bancshares	40.10%	14.20%	2.59%
BancFirst	25.13%	13.97%	1.70%

Institutional & Insider Ownership

65.9% of International Bancshares shares are held by institutional investors. Comparatively, 51.7% of BancFirst shares are held by institutional investors. 13.4% of International Bancshares shares are held by company insiders. Comparatively, 32.4% of BancFirst shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

International Bancshares pays an annual dividend of $1.40 per share and has a dividend yield of 2.1%. BancFirst pays an annual dividend of $1.96 per share and has a dividend yield of 1.8%. International Bancshares pays out 20.7% of its earnings in the form of a dividend. BancFirst pays out 27.8% 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. International Bancshares has increased its dividend for 16 consecutive years and BancFirst has increased its dividend for 31 consecutive years. International Bancshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares International Bancshares and BancFirst”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Bancshares	$1.04 billion	4.06	$409.17 million	$6.76	10.07
BancFirst	$908.71 million	3.95	$216.35 million	$7.05	15.26

International Bancshares has higher revenue and earnings than BancFirst. International Bancshares is trading at a lower price-to-earnings ratio than BancFirst, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for International Bancshares and BancFirst, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Bancshares	0	0	1	0	3.00
BancFirst	0	3	1	0	2.25

International Bancshares presently has a consensus price target of $85.00, suggesting a potential upside of 24.93%. BancFirst has a consensus price target of $128.00, suggesting a potential upside of 18.97%. Given International Bancshares’ stronger consensus rating and higher possible upside, equities analysts plainly believe International Bancshares is more favorable than BancFirst.

Risk and Volatility

International Bancshares has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, BancFirst has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Summary

International Bancshares beats BancFirst on 12 of the 16 factors compared between the two stocks.

About International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services in Texas and the State of Oklahoma. It accepts checking and saving deposits; and offers commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The company also provides international banking services, including letters of credit, commercial and industrial loans, and foreign exchange services. In addition, it offers other banking related services, such as credit cards, safety deposit boxes, collection, notary public, escrow, drive up and walk up facilities, and other customary banking services; and Internet banking services, as well as securities products through third party providers. The company was founded in 1966 and is headquartered in Laredo, Texas.

About BancFirst

BancFirst Corporation operates as the bank holding company for BancFirst that provides a range of commercial banking services to retail customers, and small to medium-sized businesses. The company operates through BancFirst Metropolitan Banks, BancFirst Community Banks, Pegasus, Worthington, and Other Financial Services segments. It offers checking accounts, negotiable order of withdrawal accounts, savings accounts, money market accounts, sweep accounts, club accounts, individual retirement accounts, and certificates of deposit, as well as overdraft protection and auto draft services. The company also provides commercial and agricultural non-real estate loans for working capital, facilities acquisition or expansion, purchase of equipment, and other needs; lending services that include private banking, energy, commercial and residential real estate, and commercial and industrial loans; and loans to finance purchases of consumer goods, such as automobiles, boats, household goods, vacations, and education. In addition, it engages in the investment management and administration of trusts for individuals, corporations, and employee benefit plans, as well as bond trustee and paying agent business for various Oklahoma municipalities and governmental entities; and provision of item processing, research, and other correspondent banking services to financial institutions and governmental units. Further, the company provides insurance agency services; depository and funds transfer, collection, safe deposit box, cash management, and other services. It serves customers in non-metropolitan trade centers and cities in the metropolitan statistical areas of Oklahoma. The company was formerly known as United Community Corporation and changed its name to BancFirst Corporation in November 1988. BancFirst Corporation was incorporated in 1984 and is headquartered in Oklahoma City, Oklahoma.