BNC Bancorp (NASDAQ: BNCN) and First Republic Bank (NYSE:FRC) are both financials companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.
Volatility and Risk
BNC Bancorp has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, First Republic Bank has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.
BNC Bancorp pays an annual dividend of $0.05 per share and has a dividend yield of 0.1%. First Republic Bank pays an annual dividend of $0.68 per share and has a dividend yield of 0.6%. BNC Bancorp pays out 3.8% of its earnings in the form of a dividend. First Republic Bank pays out 16.6% 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 Republic Bank has raised its dividend for 4 consecutive years. First Republic Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares BNC Bancorp and First Republic Bank’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|First Republic Bank||$2.34 billion||7.06||$646.80 million||$4.10||25.53|
First Republic Bank has higher revenue and earnings than BNC Bancorp. First Republic Bank is trading at a lower price-to-earnings ratio than BNC Bancorp, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and price targets for BNC Bancorp and First Republic Bank, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Republic Bank||0||8||5||0||2.38|
BNC Bancorp presently has a consensus price target of $33.88, indicating a potential downside of 3.63%. First Republic Bank has a consensus price target of $104.33, indicating a potential downside of 0.31%. Given First Republic Bank’s stronger consensus rating and higher probable upside, analysts clearly believe First Republic Bank is more favorable than BNC Bancorp.
Institutional & Insider Ownership
62.6% of BNC Bancorp shares are owned by institutional investors. Comparatively, 97.7% of First Republic Bank shares are owned by institutional investors. 6.2% of BNC Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This table compares BNC Bancorp and First Republic Bank’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Republic Bank||27.37%||12.16%||0.96%|
First Republic Bank beats BNC Bancorp on 12 of the 14 factors compared between the two stocks.
About BNC Bancorp
BNC Bancorp is a one-bank holding company for Bank of North Carolina (the Bank). The Bank is a full service commercial bank, which provides a range of banking services tailored to the particular banking needs of the communities it serves. It is engaged in the business of attracting deposits from the general public and using those deposits, together with other funding from its lines of credit, to make commercial and consumer loans. It provides banking services to individuals and small to medium-sized local businesses. It also offers a range of banking services, including traditional products, such as checking and savings accounts. Its other banking services include Mortgage Lending, Small Business Administration Lending, Wealth Management Services and Insurance Services. It offers an array of residential mortgage products, including long-term fixed rate and variable rate loans. Its Wealth Management Services include financial planning, wealth management, and trust and estate planning.
About First Republic Bank
First Republic Bank is a commercial bank and trust company. The Bank specializes in providing services, including private banking, private business banking, real estate lending and wealth management services, including trust and custody services, to clients in selected metropolitan areas in the United States. It operates through two segments: Commercial Banking and Wealth Management. The Commercial Banking segment is engaged in attracting funds from the public; originating loans, primarily real estate secured mortgage loans, and investing in investment securities. The Wealth Management segment consists of First Republic Investment Management, Inc.; its money market mutual fund activities through third-party providers and the brokerage activities of First Republic Securities Company, LLC; First Republic Trust Company and First Republic Trust Company of Delaware LLC (the Trust Company), and its foreign exchange activities. It offers a range of internally managed investment services.
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