Analyzing First Bank (NASDAQ:FRBA) and Banco Bradesco (NYSE:BBDO)

First Bank (NASDAQ:FRBA) and Banco Bradesco (NYSE:BBDO) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of current ratings for First Bank and Banco Bradesco, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Bank	0	0	1	0	3.00
Banco Bradesco	0	0	0	0	0.00

First Bank presently has a consensus target price of $17.00, indicating a potential upside of 11.84%. Given First Bank’s stronger consensus rating and higher probable upside, equities analysts plainly believe First Bank is more favorable than Banco Bradesco.

Earnings and Valuation

This table compares First Bank and Banco Bradesco”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Bank	$229.43 million	1.30	$42.24 million	$1.67	9.10
Banco Bradesco	$39.41 billion	0.52	$2.85 billion	$0.26	7.37

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

Volatility and Risk

First Bank has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Banco Bradesco has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500.

Insider & Institutional Ownership

64.9% of First Bank shares are held by institutional investors. 13.1% of First Bank shares are held by company insiders. Comparatively, 0.3% of Banco Bradesco shares are held 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.

Profitability

This table compares First Bank and Banco Bradesco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Bank	18.41%	11.06%	1.19%
Banco Bradesco	7.43%	10.17%	0.86%

Dividends

First Bank pays an annual dividend of $0.24 per share and has a dividend yield of 1.6%. Banco Bradesco pays an annual dividend of $0.03 per share and has a dividend yield of 1.6%. First Bank pays out 14.4% of its earnings in the form of a dividend. Banco Bradesco pays out 11.5% 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.

Summary

First Bank beats Banco Bradesco on 12 of the 16 factors compared between the two stocks.

About First Bank

First Bank provides various banking products and services to small to mid-sized businesses and individuals. The company accepts various deposits, including non-interest-bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts, and certificates of deposit, as well as commercial checking accounts. It also offers various loan products comprising commercial and industrial loans, which include line of credit, inventory, equipment, and short-term working capital financing; commercial real estate loans, such as owner-occupied, investor, construction and development, and multi-family loans; residential real estate loans comprising residential mortgages, first and second lien home equity loans, and revolving lines of credit; and consumer and other loans consists of auto, personal, traditional installment, and other loans. The company also provides electronic banking services, including Internet and mobile banking, electronic bill payment, and banking by phone; ATM and debit cards, and wire and ACH transfer services; remote deposit capture; and cash management services, as well as engages in the capital markets activities. It operates full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset, and Williamstown, New Jersey; Doylestown, Trevose, Warminster, and West Chester, Paoli, Malvern, Coventry, Devon, Lionville, and Glen Mills Pennsylvania; and Palm Beach, Florida. First Bank was incorporated in 2007 and is headquartered in Hamilton, New Jersey.

About Banco Bradesco

Banco Bradesco S.A., together with its subsidiaries, provides various banking products and services to individuals, corporates, and businesses in Brazil and internationally. The company operates through two segments, Banking and Insurance. It provides current, savings, click, and salary accounts; real estate credit, vehicle financing, payroll loans, mortgage loans, microcredit, leasing, and personal and installment credit; overdraft and agribusiness loans; debit and business cards; financial and security services; consortium products; car, personal accident, dental, travel, and life insurance; investment products; pension products; foreign currency exchange services; capitalization bonds; and internet banking services. Banco Bradesco S.A. was founded in 1943 and is headquartered in Osasco, Brazil.