Critical Analysis: F.N.B. (NYSE:FNB) & Peoples Financial (OTCMKTS:PFBX)

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

Institutional & Insider Ownership

79.3% of F.N.B. shares are owned by institutional investors. Comparatively, 32.8% of Peoples Financial shares are owned by institutional investors. 1.5% of F.N.B. shares are owned by company insiders. Comparatively, 28.1% of Peoples Financial 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.

Earnings and Valuation

This table compares F.N.B. and Peoples Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
F.N.B.	$2.69 billion	2.25	$565.00 million	$1.62	10.54
Peoples Financial	$35.66 million	2.75	$3.91 million	$0.88	24.16

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

Dividends

F.N.B. pays an annual dividend of $0.48 per share and has a dividend yield of 2.8%. Peoples Financial pays an annual dividend of $0.36 per share and has a dividend yield of 1.7%. F.N.B. pays out 29.6% of its earnings in the form of a dividend. Peoples Financial pays out 40.9% 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. F.N.B. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
F.N.B.	0	0	6	0	3.00
Peoples Financial	0	0	0	0	0.00

F.N.B. currently has a consensus target price of $20.20, indicating a potential upside of 18.34%. Given F.N.B.’s stronger consensus rating and higher possible upside, equities analysts clearly believe F.N.B. is more favorable than Peoples Financial.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
F.N.B.	21.64%	8.94%	1.19%
Peoples Financial	11.31%	4.06%	0.53%

Risk and Volatility

F.N.B. has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Peoples Financial has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500.

Summary

F.N.B. beats Peoples Financial on 13 of the 16 factors compared between the two stocks.

About F.N.B.

F.N.B. Corporation, a bank and financial holding company, provides a range of financial products and services primarily to consumers, corporations, governments, and small- to medium-sized businesses in the United States. The company operates through three segments: Community Banking, Wealth Management, and Insurance. The Community Banking segment offers commercial and consumer banking services, including corporate and small business banking, investment real estate financing, business credit, capital market, and lease financing services. It also provides consumer banking products and services, such as deposit products, mortgage and consumer lending services, and mobile and online banking services. The Wealth Management segment provides personal and corporate fiduciary services comprising administration of decedent and trust estates; and securities brokerage and investment advisory services, mutual funds, and annuities. The Insurance segment comprises commercial and personal insurance, and reinsurance products, as well as mezzanine financing options for small- to medium-sized businesses. The company operates community banking branches in Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, South Carolina, Washington, D.C., and Virginia. F.N.B. Corporation was founded in 1864 and is headquartered in Pittsburgh, Pennsylvania.

About Peoples Financial

Peoples Financial Corporation operates as the bank holding company for The Peoples Bank that provides banking, financial, and trust services to government entities, individuals, and small and commercial businesses in Mississippi. The company accepts various deposits, such as interest and non-interest-bearing checking accounts, savings accounts, certificates of deposit, and individual retirement accounts (IRAs). It offers business, commercial, real estate, construction, personal, and installment loans; and personal trust, agencies, and estate services, including living and testamentary trusts, executorships, guardianships, and conservatorships. In addition, the company provides self-directed IRAs; and escrow management, stock transfer, and bond paying agency accounts to corporate customers. Further, it offers other services consisting of safe deposit box rental, wire transfer, night drop facilities, collection, cash management, and Internet banking services. the company provides services to customers of various industries, such as seafood, retail, hospitality, hotel/motel, gaming, and construction. Peoples Financial Corporation was founded in 1896 and is headquartered in Biloxi, Mississippi.