Franklin Financial Services (NASDAQ:FRAF – Get Free Report) and Popular (NASDAQ:BPOP – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.
Profitability
This table compares Franklin Financial Services and Popular’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Franklin Financial Services | 12.85% | 10.60% | 0.71% |
| Popular | 12.20% | 11.73% | 0.83% |
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Franklin Financial Services and Popular, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Franklin Financial Services | 0 | 0 | 0 | 0 | N/A |
| Popular | 0 | 2 | 7 | 0 | 2.78 |
Insider and Institutional Ownership
24.8% of Franklin Financial Services shares are owned by institutional investors. Comparatively, 87.3% of Popular shares are owned by institutional investors. 6.9% of Franklin Financial Services shares are owned by company insiders. Comparatively, 2.1% of Popular shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Franklin Financial Services and Popular”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Franklin Financial Services | $70.71 million | 1.98 | $13.60 million | $3.12 | 10.19 |
| Popular | $2.71 billion | 2.64 | $541.34 million | $6.74 | 14.68 |
Popular has higher revenue and earnings than Franklin Financial Services. Franklin Financial Services is trading at a lower price-to-earnings ratio than Popular, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Franklin Financial Services has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500. Comparatively, Popular has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.
Dividends
Franklin Financial Services pays an annual dividend of $1.28 per share and has a dividend yield of 4.0%. Popular pays an annual dividend of $2.48 per share and has a dividend yield of 2.5%. Franklin Financial Services pays out 41.0% of its earnings in the form of a dividend. Popular pays out 36.8% 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
Popular beats Franklin Financial Services on 12 of the 15 factors compared between the two stocks.
About Franklin Financial Services
Franklin Financial Services Corporation operates as the bank holding company for Farmers and Merchants Trust Company of Chambersburg that provides commercial, retail banking, and trust services to businesses, individuals, governmental entities, and non-profit organizations in Pennsylvania. It offers various deposit products, including checking, savings, money management, and time deposit accounts, as well as demand deposits. The company also provides commercial real estate, construction and land development, commercial and industrial, and residential mortgage loans, as well as installment and revolving loans; consumer loans comprising unsecured personal lines of credit and installment loans; and secured and unsecured commercial and industrial loans, including accounts receivable and inventory financing, and commercial equipment financing. In addition, it offers various investment and trust services comprising estate planning and administration, corporate and personal trust fund management, pension, and profit sharing and other employee benefit funds management services, and custodial services, as well as non-trust related investment services; sells mutual funds, annuities, and insurance products; and offers safe deposit, pension, and fiduciary services. Further, the company engages in non-bank investment activities, such as venture capital investments. The company was founded in 1906 and is headquartered in Chambersburg, Pennsylvania.
About Popular
Popular, Inc., through its subsidiaries, provides various retail, mortgage, and commercial banking products and services in Puerto Rico, the United States, and the British Virgin Islands. The company provides savings, NOW, money market, and other interest-bearing demand accounts; non-interest bearing demand deposits; and certificates of deposit. It also offers commercial and industrial, commercial multi-family, commercial real estate, and residential mortgage loans; consumer loans, including personal loans, credit cards, automobile loans, home equity lines of credit, and other loans to individual borrowers; construction loans; and lease financing comprising automobile loans/leases. In addition, the company provides investment banking, auto and equipment leasing and financing, broker-dealer, and insurance services; debit cards; and online banking services. Popular, Inc. was founded in 1893 and is headquartered in Hato Rey, Puerto Rico.
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