F.N.B. (NYSE:FNB) and Financial Institutions (NASDAQ:FISI) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, valuation, earnings and institutional ownership.

Risk and Volatility

F.N.B. has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, Financial Institutions has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Dividends

F.N.B. pays an annual dividend of $0.48 per share and has a dividend yield of 4.1%. Financial Institutions pays an annual dividend of $1.00 per share and has a dividend yield of 3.2%. F.N.B. pays out 40.7% of its earnings in the form of a dividend. Financial Institutions pays out 38.9% 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. Financial Institutions has increased its dividend for 3 consecutive years.

Insider and Institutional Ownership

74.4% of F.N.B. shares are held by institutional investors. Comparatively, 71.0% of Financial Institutions shares are held by institutional investors. 0.6% of F.N.B. shares are held by company insiders. Comparatively, 4.0% of Financial Institutions shares are held by company 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 Ratings

This is a breakdown of current recommendations for F.N.B. and Financial Institutions, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
F.N.B. 0 0 4 0 3.00
Financial Institutions 0 0 0 0 N/A

F.N.B. currently has a consensus target price of $13.75, indicating a potential upside of 17.82%. Given F.N.B.’s higher probable upside, analysts clearly believe F.N.B. is more favorable than Financial Institutions.

Valuation and Earnings

This table compares F.N.B. and Financial Institutions’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
F.N.B. $1.54 billion 2.46 $387.25 million $1.18 9.89
Financial Institutions $189.21 million 2.61 $39.53 million $2.57 11.99

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

Profitability

This table compares F.N.B. and Financial Institutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
F.N.B. 25.13% 8.43% 1.15%
Financial Institutions 20.81% 11.60% 1.07%

Summary

F.N.B. beats Financial Institutions on 9 of the 16 factors compared between the two stocks.

F.N.B. Company Profile

F.N.B. Corporation, a financial holding company, provides a range of financial services primarily to consumers, corporations, governments, and small- to medium-sized businesses. The company operates through three segments: Community Banking, Wealth Management, and Insurance. It offers commercial banking solutions, including corporate and small business banking, investment real estate financing, business credit, capital market, and lease financing services. The company also provides consumer banking products and services, such as deposit products, mortgage and consumer lending services, and mobile and online banking services; and wealth management services comprising fiduciary and brokerage, asset management, private banking, and insurance services, as well as mezzanine financing options for small- to medium-sized businesses. As of December 31, 2018, it operated 396 community banking offices in Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, and South Carolina. F.N.B. Corporation was founded in 1864 and is headquartered in Pittsburgh, Pennsylvania.

Financial Institutions Company Profile

Financial Institutions, Inc. operates as the holding company for Five Star Bank that provides banking and financial services to individuals, municipalities, and businesses. It operates in two segments, Banking and Non-Banking. The company offers checking and savings account programs, including money market accounts, certificates of deposit, and sweep investments, as well as individual retirement and other qualified plan accounts. It also provides short and medium-term commercial loans for working capital, business expansion, and purchase of equipment; commercial business loans to the agricultural industry for short-term crop production, farm equipment, and livestock financing; commercial mortgage loans to finance the purchase of real property; and one-to-four family residential mortgage loans, home improvement loans, closed-end home equity loans, and home equity lines of credit, as well as consumer loans, such as automobile, recreational vehicle, boat, personal, and deposit account collateralized loans. In addition, the company provides personal insurance, including automobile, homeowners, boat, recreational vehicle, landlord, and umbrella coverage; commercial insurance, such as property, liability, automobile, inland marine, workers compensation, bonds, crop, and umbrella insurance products; and financial services comprising life and disability insurance, Medicare supplements, long-term care, annuities, mutual funds, and retirement programs. Further, it offers customized investment advice and advisory, wealth management, investment consulting, and retirement plan services, as well as operates a real estate investment trust that holds residential mortgages and commercial real estate loans. The company operates a network of 53 offices in the New York State. Financial Institutions, Inc. was founded in 1817 and is headquartered in Warsaw, New York.

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