Critical Contrast: FirstSun Capital Bancorp (NASDAQ:FSUN) and First Merchants (NASDAQ:FRME)

FirstSun Capital Bancorp (NASDAQ:FSUN) and First Merchants (NASDAQ:FRME) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, earnings, valuation, risk and dividends.

Profitability

This table compares FirstSun Capital Bancorp and First Merchants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FirstSun Capital Bancorp	15.99%	9.24%	1.19%
First Merchants	21.35%	9.88%	1.23%

Institutional and Insider Ownership

73.9% of First Merchants shares are owned by institutional investors. 12.5% of FirstSun Capital Bancorp shares are owned by insiders. Comparatively, 1.4% of First Merchants shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for FirstSun Capital Bancorp and First Merchants, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FirstSun Capital Bancorp	0	0	4	0	3.00
First Merchants	0	0	4	0	3.00

FirstSun Capital Bancorp currently has a consensus target price of $46.00, indicating a potential upside of 26.37%. First Merchants has a consensus target price of $48.25, indicating a potential upside of 24.20%. Given FirstSun Capital Bancorp’s higher probable upside, research analysts plainly believe FirstSun Capital Bancorp is more favorable than First Merchants.

Earnings and Valuation

This table compares FirstSun Capital Bancorp and First Merchants”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FirstSun Capital Bancorp	$549.33 million	1.84	$75.63 million	$3.13	11.63
First Merchants	$1.07 billion	2.09	$201.40 million	$3.86	10.06

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

Summary

First Merchants beats FirstSun Capital Bancorp on 8 of the 11 factors compared between the two stocks.

About FirstSun Capital Bancorp

FirstSun Capital Bancorp engages in the provision of commercial banking services. It operates through the following segments: Banking, Mortgage Operations, and Corporate. The Banking segment consists of loans and provides deposits and fee-based services to consumer, business, and mortgage lending customers. The Mortgage Operations segment originates, sells, services, and manages market risk from changes in interest rates on one-to-four family residential mortgage loans to sell and hold. The company is founded on November 9, 1981 headquartered in Denver, CO.

About First Merchants

First Merchants Corporation operates as the financial holding company for First Merchants Bank that provides community banking services. The company offers a range of financial services, including time, savings, and demand deposits; and consumer, commercial, agri-business, public finance, and real estate mortgage loans. It also provides personal and corporate trust; brokerage and private wealth management; and letters of credit, repurchase agreements, and other corporate services. The company operates banking locations in Indiana, Illinois, Ohio, and Michigan counties. It also offers its services through electronic and mobile delivery channels. First Merchants Corporation was founded in 1893 and is headquartered in Muncie, Indiana.