First Commonwealth Financial (NYSE:FCF) versus Regions Financial (NYSE:RF) Critical Survey

Regions Financial (NYSE:RF) and First Commonwealth Financial (NYSE:FCF) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, earnings, risk, valuation, institutional ownership, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Regions Financial and First Commonwealth Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regions Financial	1	5	11	0	2.59
First Commonwealth Financial	0	3	2	0	2.40

Regions Financial presently has a consensus target price of $26.71, indicating a potential downside of 2.03%. First Commonwealth Financial has a consensus target price of $17.30, indicating a potential downside of 8.13%. Given Regions Financial’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Regions Financial is more favorable than First Commonwealth Financial.

Insider & Institutional Ownership

79.4% of Regions Financial shares are owned by institutional investors. Comparatively, 72.6% of First Commonwealth Financial shares are owned by institutional investors. 0.3% of Regions Financial shares are owned by insiders. Comparatively, 2.0% of First Commonwealth Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Regions Financial has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, First Commonwealth Financial has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.

Valuation and Earnings

This table compares Regions Financial and First Commonwealth Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regions Financial	$9.15 billion	2.71	$2.07 billion	$1.77	15.40
First Commonwealth Financial	$626.61 million	3.06	$157.06 million	$1.48	12.72

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Regions Financial	18.78%	12.60%	1.30%
First Commonwealth Financial	21.87%	11.19%	1.30%

Dividends

Regions Financial pays an annual dividend of $1.00 per share and has a dividend yield of 3.7%. First Commonwealth Financial pays an annual dividend of $0.52 per share and has a dividend yield of 2.8%. Regions Financial pays out 56.5% of its earnings in the form of a dividend. First Commonwealth 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. Regions Financial has raised its dividend for 12 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Regions Financial beats First Commonwealth Financial on 12 of the 16 factors compared between the two stocks.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.

About First Commonwealth Financial

First Commonwealth Financial Corporation, a financial holding company, provides various consumer and commercial banking services in the United States. Its consumer services include personal checking accounts, interest-earning checking accounts, savings and health savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection, IRA accounts, and automated teller machine (atm) services, as well as internet, mobile, and telephone banking services. The company's commercial banking services comprise commercial lending, business checking accounts, online account management services, payroll direct deposits, commercial cash management services, and repurchase agreements, as well as ACH origination services. In addition, it offers various trust and asset management services; auto, home, and business insurance, as well as term life insurance; and annuities, mutual funds, and stock and bond brokerage services through a broker-dealer and insurance brokers. The company was founded in 1934 and is headquartered in Indiana, Pennsylvania.