Boston Private Financial (BPFH) & Franklin Financial Network (FSB) Financial Survey

Boston Private Financial (NASDAQ: BPFH) and Franklin Financial Network (NYSE:FSB) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Earnings & Valuation

This table compares Boston Private Financial and Franklin Financial Network’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Boston Private Financial $412.66 million 3.34 $40.59 million $0.88 18.58
Franklin Financial Network $147.17 million 3.05 $28.08 million $2.42 14.01

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

Risk and Volatility

Boston Private Financial has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Franklin Financial Network has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Dividends

Boston Private Financial pays an annual dividend of $0.48 per share and has a dividend yield of 2.9%. Franklin Financial Network does not pay a dividend. Boston Private Financial pays out 54.5% of its earnings in the form of a dividend.

Institutional & Insider Ownership

92.5% of Boston Private Financial shares are owned by institutional investors. Comparatively, 55.7% of Franklin Financial Network shares are owned by institutional investors. 2.1% of Boston Private Financial shares are owned by company insiders. Comparatively, 10.6% of Franklin Financial Network shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Boston Private Financial and Franklin Financial Network, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Boston Private Financial 0 5 0 0 2.00
Franklin Financial Network 0 6 1 0 2.14

Boston Private Financial currently has a consensus target price of $16.40, suggesting a potential upside of 0.31%. Franklin Financial Network has a consensus target price of $39.20, suggesting a potential upside of 15.63%. Given Franklin Financial Network’s stronger consensus rating and higher probable upside, analysts plainly believe Franklin Financial Network is more favorable than Boston Private Financial.

Profitability

This table compares Boston Private Financial and Franklin Financial Network’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Boston Private Financial 11.01% 10.82% 0.99%
Franklin Financial Network 19.08% 11.32% 0.93%

Summary

Franklin Financial Network beats Boston Private Financial on 9 of the 16 factors compared between the two stocks.

About Boston Private Financial

Boston Private Financial Holdings, Inc. operates as the bank holding company for Boston Private Bank & Trust Company that provides a range of banking services in the United States. The company operates through four segments: Private Banking, Wealth Management and Trust, Investment Management, and Wealth Advisory. The Private Banking segment offers private banking services to high net worth individuals, privately-owned businesses and partnerships, and nonprofit organizations; and financing services for affordable housing, first-time homebuyers, economic development, social services, community revitalization, and small businesses. It provides various deposit products. This segment also offers loans to individuals, such as residential mortgage loans, mortgage loans on investment or vacation properties, unsecured and secured personal lines of credits, home equity loans, and overdraft protection; and loans to businesses consisting of commercial and mortgage loans, revolving lines of credit, working capital loans, equipment financing, community lending programs, and construction and land loans. The Wealth Management and Trust segment provides wealth management solutions, including customized investment, wealth planning, trust, and family office services to high net worth individuals and families. The Investment Management segment offers services for pension funds, endowments, trusts, foundations and select institutions, mutual funds, and high net worth individuals and their families. The Wealth Advisory segment provides financial, estate and insurance, charitable, and intergenerational gifting and succession planning, as well as tax planning and preparation services. As of January 2, 2018, the company had offices in Boston, New York, Los Angeles, San Francisco, San Jose, Florida, and Wisconsin. Boston Private Financial Holdings, Inc. was incorporated in 1987 and is headquartered in Boston, Massachusetts.

About Franklin Financial Network

Franklin Financial Network, Inc. is a financial holding company. Through its bank subsidiary, Franklin Synergy Bank (the Bank), a commercial bank, the Company provides a range of banking and related financial services. The Company focuses on the provision of services to small businesses, corporate entities, local governments and individuals. As of December 31, 2016, the Company operated through 12 branches in Williamson and Rutherford counties and a loan production office within the Nashville metropolitan area. The Company’s loan portfolio consists of real estate loans, including construction and land development loans, commercial loans and residential loans; commercial and industrial, and consumer and other loans. The Company’s investment securities portfolio consists of both securities classified as available-for-sale and securities classified as held-to-maturity. The Company’s primary sources of funds include deposits.

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