Farmers Capital Bank Corporation (NASDAQ: FFKT) and F.N.B. Corporation (NYSE:FNB) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitabiliy, institutional ownership, valuation, dividends, risk, analyst recommendations and earnings.

Profitability

This table compares Farmers Capital Bank Corporation and F.N.B. Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Farmers Capital Bank Corporation 16.12% 7.79% 0.86%
F.N.B. Corporation 18.06% 7.21% 0.88%

Institutional & Insider Ownership

52.1% of Farmers Capital Bank Corporation shares are held by institutional investors. Comparatively, 74.7% of F.N.B. Corporation shares are held by institutional investors. 3.1% of Farmers Capital Bank Corporation shares are held by insiders. Comparatively, 1.2% of F.N.B. Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Farmers Capital Bank Corporation and F.N.B. Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Farmers Capital Bank Corporation 0 1 1 0 2.50
F.N.B. Corporation 0 2 6 1 2.89

Farmers Capital Bank Corporation presently has a consensus target price of $35.50, suggesting a potential downside of 11.36%. F.N.B. Corporation has a consensus target price of $17.94, suggesting a potential upside of 26.95%. Given F.N.B. Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe F.N.B. Corporation is more favorable than Farmers Capital Bank Corporation.

Dividends

Farmers Capital Bank Corporation pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. F.N.B. Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 3.4%. Farmers Capital Bank Corporation pays out 21.9% of its earnings in the form of a dividend. F.N.B. Corporation pays out 64.0% 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.

Earnings and Valuation

This table compares Farmers Capital Bank Corporation and F.N.B. Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Farmers Capital Bank Corporation $77.83 million 3.87 $13.75 million $1.83 21.89
F.N.B. Corporation $799.90 million 5.68 $240.98 million $0.75 18.84

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

Volatility & Risk

Farmers Capital Bank Corporation has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, F.N.B. Corporation has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Summary

F.N.B. Corporation beats Farmers Capital Bank Corporation on 12 of the 17 factors compared between the two stocks.

About Farmers Capital Bank Corporation

Farmers Capital Bank Corporation is a bank holding company headquartered in Frankfort, Kentucky. The Company operates 34 banking locations in 21 communities throughout Central and Northern Kentucky, a data processing company, and an insurance company.

About F.N.B. Corporation

F.N.B. Corporation is a financial holding company. The Company operates through four segments: Community Banking, Wealth Management, Insurance and Consumer Finance. Its Community Banking segment consists of First National Bank of Pennsylvania (FNBPA), which offers services, including commercial and individual demand, savings and time deposit accounts and commercial, mortgage and individual installment loans. It operates its Community Banking business through a network of over 290 branches in Pennsylvania, Ohio, Maryland and West Virginia. Its Wealth Management segment delivers wealth management services to individuals, corporations and retirement funds, as well as existing customers of Community Banking. The Company’s Insurance segment operates principally through First National Insurance Agency, LLC (FNIA), which is a subsidiary of the Corporation. Its Consumer Finance segment operates through its subsidiary, Regency Finance Company. It also operates other non-banking subsidiaries.

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