Critical Analysis: Dacotah Banks (OTCMKTS:DBIN) vs. First Financial (NASDAQ:THFF)

Dacotah Banks (OTCMKTS:DBIN) and First Financial (NASDAQ:THFF) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, profitability, risk, earnings, analyst recommendations and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dacotah Banks	11.08%	N/A	N/A
First Financial	14.86%	8.25%	0.89%

Volatility & Risk

Dacotah Banks has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, First Financial has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Dacotah Banks and First Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dacotah Banks	0	0	0	0	N/A
First Financial	0	1	0	0	2.00

First Financial has a consensus price target of $45.00, suggesting a potential upside of 6.84%. Given First Financial’s higher possible upside, analysts plainly believe First Financial is more favorable than Dacotah Banks.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dacotah Banks	$199.04 million	1.86	$26.17 million	$2.25	14.67
First Financial	$271.10 million	1.83	$60.67 million	$3.69	11.41

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

Insider and Institutional Ownership

72.7% of First Financial shares are held by institutional investors. 3.7% of First Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Dacotah Banks pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. First Financial pays an annual dividend of $1.80 per share and has a dividend yield of 4.3%. Dacotah Banks pays out 26.7% of its earnings in the form of a dividend. First Financial pays out 48.8% 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.

Summary

First Financial beats Dacotah Banks on 11 of the 14 factors compared between the two stocks.

About Dacotah Banks

Dacotah Banks, Inc. provides various banking and financial products and services to individuals and businesses. The company provides demand and certificates of deposit; checking, individual retirement, health savings, and money market accounts; and commercial, commercial real estate, residential mortgage, and consumer loans. It also offers vehicle, boat, motorhome, mortgage, camper, motorcycle, snowmobile, jet SKI, and ATV loans; and unsecured, overdraft protection, and student loans; business, term, and small business administration loans, and other loans. In addition, the company provides credit, debit, and gift cards; mobile and online banking; auto, homeowner, health, and life insurance products; and estate, and trust services. Further, the company offers retirement planning, investment management, foundation, endowment, bill paying, charitable giving, and elder care services, as well as cash management services. Additionally, it provides offers operating lines of credit, state and federal programs, and equipment loans and leases. It also provides crop, homeowner, health, life, farm, and ranch insurance services; and farm and ranch management services. The company operates across various locations in Minnesota, North Dakota, and South Dakota. Dacotah Banks, Inc. was founded in 1955 and is headquartered in Aberdeen, South Dakota.

About First Financial

First Financial Corporation, through its subsidiaries, provides various financial services. The company offers non-interest-bearing demand, interest-bearing demand, savings, time, and other time deposits. It also provides commercial loans primarily to expand a business or finance asset purchases; residential real estate and residential real estate construction loans; and home equity loans and lines, secured loans, and cash/CD secured and unsecured loans. In addition, the company offers lease financing, trust account, depositor, and insurance services. The company was founded in 1834 and is headquartered in Terre Haute, Indiana.