First Commonwealth Financial (NYSE:FCF) versus Regions Financial (NYSE:RF) Head-To-Head Review

First Commonwealth Financial (NYSE:FCF) and Regions Financial (NYSE:RF) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.

Dividends

First Commonwealth Financial pays an annual dividend of $0.52 per share and has a dividend yield of 2.8%. Regions Financial pays an annual dividend of $1.00 per share and has a dividend yield of 3.7%. First Commonwealth Financial pays out 35.1% of its earnings in the form of a dividend. Regions Financial pays out 56.5% 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. Regions Financial has increased its dividend for 12 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings for First Commonwealth Financial and Regions Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Commonwealth Financial	0	3	2	0	2.40
Regions Financial	1	5	11	0	2.59

First Commonwealth Financial currently has a consensus price target of $17.30, indicating a potential downside of 8.13%. Regions Financial has a consensus price target of $26.71, indicating a potential downside of 2.03%. Given Regions Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Regions Financial is more favorable than First Commonwealth Financial.

Volatility and Risk

First Commonwealth Financial has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Regions Financial has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Commonwealth Financial	21.87%	11.19%	1.30%
Regions Financial	18.78%	12.60%	1.30%

Valuation & Earnings

This table compares First Commonwealth Financial and Regions Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Commonwealth Financial	$626.61 million	3.06	$157.06 million	$1.48	12.72
Regions Financial	$9.15 billion	2.71	$2.07 billion	$1.77	15.40

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

Institutional and Insider Ownership

72.6% of First Commonwealth Financial shares are held by institutional investors. Comparatively, 79.4% of Regions Financial shares are held by institutional investors. 2.0% of First Commonwealth Financial shares are held by insiders. Comparatively, 0.3% of Regions Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Regions Financial beats First Commonwealth Financial on 12 of the 16 factors compared between the two stocks.

About First Commonwealth Financial

First Commonwealth Financial Corporation, a financial holding company, provides various consumer and commercial banking services in the United States. Its consumer services include personal checking accounts, interest-earning checking accounts, savings and health savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection, IRA accounts, and automated teller machine (atm) services, as well as internet, mobile, and telephone banking services. The company's commercial banking services comprise commercial lending, business checking accounts, online account management services, payroll direct deposits, commercial cash management services, and repurchase agreements, as well as ACH origination services. In addition, it offers various trust and asset management services; auto, home, and business insurance, as well as term life insurance; and annuities, mutual funds, and stock and bond brokerage services through a broker-dealer and insurance brokers. The company was founded in 1934 and is headquartered in Indiana, Pennsylvania.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.