Reviewing Allstate (ALL) and First Financial (THFF)

Allstate (NYSE: ALL) and First Financial (NASDAQ:THFF) are both financials companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Dividends

Allstate pays an annual dividend of $1.48 per share and has a dividend yield of 1.5%. First Financial pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Allstate pays out 20.6% of its earnings in the form of a dividend. First Financial pays out 35.1% 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. Allstate has raised its dividend for 7 consecutive years.

Risk and Volatility

Allstate has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, First Financial has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.

Earnings & Valuation

This table compares Allstate and First Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allstate $36.53 billion 1.00 $1.88 billion $7.20 14.15
First Financial $156.31 million 3.56 $38.41 million $2.85 15.98

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

Insider & Institutional Ownership

76.4% of Allstate shares are held by institutional investors. Comparatively, 53.7% of First Financial shares are held by institutional investors. 1.6% of Allstate shares are held by company insiders. Comparatively, 3.6% of First Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Allstate and First Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allstate 7.32% 13.11% 2.32%
First Financial 23.48% 8.11% 1.17%

Analyst Ratings

This is a summary of recent ratings for Allstate and First Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allstate 2 6 4 0 2.17
First Financial 0 1 0 0 2.00

Allstate currently has a consensus target price of $94.50, indicating a potential downside of 7.23%. First Financial has a consensus target price of $50.00, indicating a potential upside of 9.77%. Given First Financial’s higher probable upside, analysts plainly believe First Financial is more favorable than Allstate.

Summary

Allstate beats First Financial on 11 of the 17 factors compared between the two stocks.

About Allstate

The Allstate Corporation (Allstate) is a holding company for Allstate Insurance Company. The Company’s business is conducted principally through Allstate Insurance Company, Allstate Life Insurance Company and other subsidiaries. It is engaged in the property-liability insurance business and the life insurance, retirement and investment products business. Its segments include Allstate Protection, Allstate Financial, Discontinued Lines and Coverages, and Corporate and Other. The Allstate Protection segment sells private passenger auto, homeowners, and other property-liability insurance products through agencies and directly through contact centers and the Internet. The Allstate Financial segment sells life insurance and voluntary accident and health insurance products. The Corporate and Other segment consists of holding company activities and certain non-insurance operations. Its Discontinued Lines and Coverages segment includes results from property-liability insurance coverage.

About First Financial

First Financial Corporation is a financial holding company. The Company, through its subsidiaries, offers financial services, including commercial, mortgage and consumer lending, lease financing, trust account services, depositor services and insurance services. The Company’s subsidiaries include First Financial Bank, N.A. (the Bank), The Morris Plan Company of Terre Haute (Morris Plan), First Chanticleer Corporation and FFB Risk Management Co., Inc. The Bank has two investment subsidiaries, Portfolio Management Specialists A (Specialists A) and Portfolio Management Specialists B (Specialists B), which holds and manages certain assets to manage various income streams and provides opportunities for capital creation as needed. The Bank’s loan portfolio includes commercial loans, residential loans and consumer loans. Its deposits include non-interest-bearing demand deposits, interest-bearing demand deposits, savings deposits, time deposits: $100,000 or more, and other time deposits.

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