Financial Analysis: CBTX (NASDAQ:CBTX) vs. First Midwest Bancorp (NASDAQ:FMBI)

CBTX (NASDAQ:CBTX) and First Midwest Bancorp (NASDAQ:FMBI) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for CBTX and First Midwest Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CBTX 0 1 0 0 2.00
First Midwest Bancorp 0 2 3 0 2.60

CBTX presently has a consensus price target of $31.00, suggesting a potential upside of 4.80%. First Midwest Bancorp has a consensus price target of $23.67, suggesting a potential upside of 10.33%. Given First Midwest Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe First Midwest Bancorp is more favorable than CBTX.

Profitability

This table compares CBTX and First Midwest Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CBTX 30.50% 10.27% 1.56%
First Midwest Bancorp 22.55% 9.51% 1.26%

Insider and Institutional Ownership

28.4% of CBTX shares are held by institutional investors. Comparatively, 82.3% of First Midwest Bancorp shares are held by institutional investors. 29.2% of CBTX shares are held by insiders. Comparatively, 1.1% of First Midwest Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares CBTX and First Midwest Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CBTX $137.51 million 5.60 $47.29 million $1.89 15.65
First Midwest Bancorp $727.08 million 3.24 $157.87 million $1.67 12.84

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

Risk & Volatility

CBTX has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, First Midwest Bancorp has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500.

Dividends

CBTX pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. First Midwest Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 2.6%. CBTX pays out 21.2% of its earnings in the form of a dividend. First Midwest Bancorp pays out 33.5% 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.

CBTX Company Profile

CBTX, Inc. operates as the bank holding company for CommunityBank of Texas, National Association that provides commercial banking solutions to small and mid-sized businesses, and professionals in the United States. The company offers various deposit products, including demand, savings, money market, and time accounts; and loans, such as commercial and industrial loans, commercial real estate loans, construction and development loans, 1-4 family residential mortgage loans, multi-family residential loans, consumer loans, and agricultural loans. It also provides treasury and online banking services. CBTX, Inc. operates 35 banking locations, including 19 branches in Houston; 15 branches in Beaumont; and 1 branch in Dallas. The company was formerly known as CBFH, Inc. and changed its name to CBTX, Inc. in September 2017. CBTX, Inc. was founded in 2007 and is based in Houston, Texas.

First Midwest Bancorp Company Profile

First Midwest Bancorp, Inc. operates as the bank holding company for First Midwest Bank that provides various banking products and services. The company accepts checking, NOW, money market, and savings accounts, as well as various types of short-term and long-term certificates of deposit. Its loan products include working capital loans; accounts receivable financing; inventory and equipment financing; sector-based lending, including healthcare, asset-based lending, structured finance, and syndications; agricultural loans; and mortgages, home equity lines and loans, personal loans, specialty loans, and consumer secured loans, as well as funding for the construction, purchase, refinance, or improvement of commercial real estate properties. In addition, the company offers treasury management products and services comprising automated clearing house collection, lockbox, remote deposit capture, and financial electronic data interchange; wire transfer, account reconciliation, controlled disbursement, direct deposit, and positive pay services; information reporting services; corporate credit cards; and liquidity management, fraud prevention, and merchant services. Further, it provides fiduciary and executor, financial planning, investment advisory, employee benefit plan, and private banking services to corporate and public retirement plans, foundations and endowments, high net worth individuals, and multi-employer trust funds. Additionally, the company offers debit and automated teller machine, and credit cards; Internet and mobile, and telephone banking services; and financial education services. It serves commercial and industrial, commercial real estate, municipal, and consumer customers. The company operates 120 locations and 177 automated teller machines in greater Chicago metropolitan area, northwest Indiana, central and western Illinois, and eastern Iowa. First Midwest Bancorp, Inc. was incorporated in 1982 and is headquartered in Chicago, Illinois.

Receive News & Ratings for CBTX Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for CBTX and related companies with MarketBeat.com's FREE daily email newsletter.