Head-To-Head Contrast: Eastern Bankshares (NASDAQ:EBC) versus First Bancorp (NASDAQ:FBNC)

First Bancorp (NASDAQ:FBNC) and Eastern Bankshares (NASDAQ:EBC) are both mid-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Institutional and Insider Ownership

68.4% of First Bancorp shares are held by institutional investors. Comparatively, 71.7% of Eastern Bankshares shares are held by institutional investors. 2.0% of First Bancorp shares are held by company insiders. Comparatively, 1.3% of Eastern Bankshares 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.

Volatility and Risk

First Bancorp has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, Eastern Bankshares has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Profitability

This table compares First Bancorp and Eastern Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Bancorp	22.12%	11.31%	1.46%
Eastern Bankshares	25.12%	8.71%	1.24%

Dividends

First Bancorp pays an annual dividend of $0.96 per share and has a dividend yield of 1.5%. Eastern Bankshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. First Bancorp pays out 29.8% of its earnings in the form of a dividend. Eastern Bankshares pays out 34.1% 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. Eastern Bankshares has increased its dividend for 5 consecutive years. Eastern Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares First Bancorp and Eastern Bankshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Bancorp	$549.30 million	4.84	$111.05 million	$3.22	19.97
Eastern Bankshares	$1.12 billion	4.39	$88.22 million	$1.76	12.27

First Bancorp has higher earnings, but lower revenue than Eastern Bankshares. Eastern Bankshares is trading at a lower price-to-earnings ratio than First Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for First Bancorp and Eastern Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Bancorp	0	3	2	1	2.67
Eastern Bankshares	0	3	6	0	2.67

First Bancorp currently has a consensus target price of $68.94, indicating a potential upside of 7.21%. Eastern Bankshares has a consensus target price of $24.86, indicating a potential upside of 15.08%. Given Eastern Bankshares’ higher probable upside, analysts plainly believe Eastern Bankshares is more favorable than First Bancorp.

Summary

First Bancorp beats Eastern Bankshares on 10 of the 17 factors compared between the two stocks.

About First Bancorp

First Bancorp operates as the bank holding company for First Bank that provides banking products and services for individuals and small to medium-sized businesses. The company accepts deposit products, such as checking, savings, and money market accounts, as well as time deposits, including certificate of deposits and individual retirement accounts. It also offers loans for a range of consumer and commercial purposes comprising loans for business, real estate, personal, home improvement, and automobiles, as well as residential mortgages and small business administration loans; and accounts receivable financing and factoring, inventory financing, and purchase order financing services. In addition, the company provides credit and debit cards, letter of credits, and safe deposit box rental services, as well as electronic funds transfer services consisting of wire transfers; and internet and mobile banking, cash management, bank-by-phone services, and remote deposit capture services. Further, it offers investment and insurance products, such as mutual funds, annuities, long-term care insurance, life insurance, and company retirement plans, as well as property and casualty insurance products; and financial planning services. The company was founded in 1934 and is headquartered in Southern Pines, North Carolina.

About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.