First Interstate BancSystem (NASDAQ:FIBK) and Howard Bancorp (NASDAQ:HBMD) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.
Analyst Ratings
This is a breakdown of current recommendations and price targets for First Interstate BancSystem and Howard Bancorp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| First Interstate BancSystem | 0 | 1 | 3 | 0 | 2.75 |
| Howard Bancorp | 0 | 0 | 0 | 0 | N/A |
First Interstate BancSystem currently has a consensus target price of $40.00, indicating a potential downside of 2.89%. Given First Interstate BancSystem’s higher possible upside, analysts plainly believe First Interstate BancSystem is more favorable than Howard Bancorp.
Risk and Volatility
First Interstate BancSystem has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Howard Bancorp has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.
Earnings and Valuation
This table compares First Interstate BancSystem and Howard Bancorp’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| First Interstate BancSystem | $703.90 million | 3.69 | $181.00 million | $3.07 | 13.42 |
| Howard Bancorp | $112.47 million | 2.17 | $16.88 million | $1.01 | 12.90 |
First Interstate BancSystem has higher revenue and earnings than Howard Bancorp. Howard Bancorp is trading at a lower price-to-earnings ratio than First Interstate BancSystem, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares First Interstate BancSystem and Howard Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| First Interstate BancSystem | 23.85% | 8.42% | 1.07% |
| Howard Bancorp | -15.10% | 5.35% | 0.65% |
Institutional & Insider Ownership
51.3% of First Interstate BancSystem shares are owned by institutional investors. Comparatively, 55.1% of Howard Bancorp shares are owned by institutional investors. 22.0% of First Interstate BancSystem shares are owned by company insiders. Comparatively, 18.8% of Howard Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Summary
First Interstate BancSystem beats Howard Bancorp on 12 of the 13 factors compared between the two stocks.
About First Interstate BancSystem
First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides range of banking products and services in the United States. Its deposit products include checking, savings, time, and demand deposits; and repurchase agreements primarily for commercial and municipal depositors. The company’s loan portfolio consists of real estate loans, including commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans; commercial loans; and other loans, including fixed and variable rate loans. It also provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations, which include the administration of estates and personal trusts; management of investment accounts for individuals, employee benefit plans, and charitable foundations; and insurance planning. In addition, the company offers marketing, credit review, credit cards, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, and Internet and mobile banking services. It serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, energy, healthcare and professional services, education, governmental services, mining, technology, retail and wholesale trade, and tourism. The company operates 152 banking offices located in Idaho, Montana, Oregon, South Dakota, Washington, and Wyoming. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.
About Howard Bancorp
Howard Bancorp, Inc. operates as the bank holding company for Howard Bank that provides commercial banking, mortgage banking, and consumer finance products and services to businesses, business owners, professionals, and other consumers. The company offers various consumer and business deposit products, including demand, money market, savings, individual retirement, and commercial and retail checking accounts, as well as certificates of deposit. It also provides commercial loans, such as lines of credit, revolving credit facilities, accounts receivable and inventory financing, term loans, equipment loans, small business administration loans, stand-by letters of credit, and unsecured loans, as well as equipment lease services; commercial mortgage loans for owner occupied and investment properties; construction loans; residential mortgage loans; and secured and unsecured consumer loans. In addition, the company offers wire transfer services; automated teller machines and check cards; and safe deposit boxes, as well as credit cards through a third party processor. Further, it provides Internet banking, merchant card, overnight sweep, and remote deposit capture services; and online and mobile banking services. As of December 31, 2019, the company operated through a network of 16 full service branches, as well as eight mortgage and commercial lending offices located in Maryland. Howard Bancorp, Inc. was founded in 2004 and is headquartered in Baltimore, Maryland.
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