Reviewing Wintrust Financial (NASDAQ:WTFC) & First Interstate BancSystem (NASDAQ:FIBK)

First Interstate BancSystem (NASDAQ:FIBK) and Wintrust Financial (NASDAQ:WTFC) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.

Earnings and Valuation

This table compares First Interstate BancSystem and Wintrust Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Interstate BancSystem	$1.41 billion	2.55	$302.10 million	$3.07	12.09
Wintrust Financial	$2.80 billion	3.84	$823.84 million	$11.93	13.35

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

Volatility and Risk

First Interstate BancSystem has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Wintrust Financial has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.

Institutional and Insider Ownership

88.7% of First Interstate BancSystem shares are owned by institutional investors. Comparatively, 93.5% of Wintrust Financial shares are owned by institutional investors. 8.0% of First Interstate BancSystem shares are owned by insiders. Comparatively, 1.2% of Wintrust Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Interstate BancSystem	22.64%	9.13%	1.16%
Wintrust Financial	20.11%	13.15%	1.25%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for First Interstate BancSystem and Wintrust Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Interstate BancSystem	2	4	2	0	2.00
Wintrust Financial	0	2	10	1	2.92

First Interstate BancSystem currently has a consensus target price of $37.00, indicating a potential downside of 0.30%. Wintrust Financial has a consensus target price of $168.92, indicating a potential upside of 6.06%. Given Wintrust Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Wintrust Financial is more favorable than First Interstate BancSystem.

Dividends

First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 5.1%. Wintrust Financial pays an annual dividend of $2.20 per share and has a dividend yield of 1.4%. First Interstate BancSystem pays out 61.2% of its earnings in the form of a dividend. Wintrust Financial pays out 18.4% 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. Wintrust Financial has raised its dividend for 12 consecutive years.

Summary

Wintrust Financial beats First Interstate BancSystem on 15 of the 18 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. It offers various traditional depository products, including checking, savings, and time deposits; and repurchase agreements primarily for commercial and municipal depositors. The company also offers real estate loans comprising commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans comprising direct personal loans, credit card loans and lines of credit, and indirect loans; variable and fixed rate commercial loans for small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions; and agricultural loans. In addition, it provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. Further, the company offers marketing, credit review, loan servicing, credit cards issuance and servicing, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, other operational, and specialized staff support services, as well as online and mobile banking services. The company serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, governmental services, healthcare, hospitality, housing, professional services, real estate development, retail, technology, tourism, and wholesale trade. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.

About Wintrust Financial

Wintrust Financial Corporation operates as a financial holding company. It operates in three segments: Community Banking, Specialty Finance, and Wealth Management. The Community Banking segment offers non-interest bearing deposits, non-brokered interest-bearing transaction accounts, and savings and domestic time deposits; home equity, consumer, and real estate loans; safe deposit facilities; and automatic teller machine (ATM), online and mobile banking, and other services. It also engages in the retail origination and purchase of residential mortgages; and provision of lending, deposits, and treasury management services to condominium, homeowner, and community associations, as well as asset-based lending for middle-market companies. In addition, this segment offers loan and deposit services to mortgage brokerage companies; lending to restaurant franchisees; direct leasing; small business administration loans; commercial mortgages and construction loans; and financial solutions. It provides personal and commercial banking services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional clients. The Specialty Finance segment offers commercial and life insurance premiums financing for businesses and individuals; accounts receivable financing, value-added, and out-sourced administrative services; other specialty finance services; equipment financing through structured loan and lease products; and property and casualty premium financing; as well as data processing of payrolls, billing, and cash management services to temporary staffing industry. The Wealth Management segment provides wealth management services, such as trust and investment, asset management, tax-deferred exchange, securities brokerage, and retirement plan services. Wintrust Financial Corporation was founded in 1991 and is headquartered in Rosemont, Illinois.