Provident Financial Services (NYSE:PFS) versus F.N.B. (NYSE:FNB) Critical Analysis

F.N.B. (NYSE:FNB) and Provident Financial Services (NYSE:PFS) are both mid-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Institutional & Insider Ownership

79.2% of F.N.B. shares are owned by institutional investors. Comparatively, 72.0% of Provident Financial Services shares are owned by institutional investors. 1.5% of F.N.B. shares are owned by insiders. Comparatively, 3.0% of Provident Financial Services shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
F.N.B.	22.29%	9.10%	1.22%
Provident Financial Services	22.15%	11.00%	1.24%

Analyst Ratings

This is a summary of recent ratings and recommmendations for F.N.B. and Provident Financial Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
F.N.B.	0	2	5	0	2.71
Provident Financial Services	0	2	4	1	2.86

F.N.B. currently has a consensus target price of $20.33, suggesting a potential upside of 19.15%. Provident Financial Services has a consensus target price of $26.79, suggesting a potential upside of 21.22%. Given Provident Financial Services’ stronger consensus rating and higher probable upside, analysts plainly believe Provident Financial Services is more favorable than F.N.B..

Dividends

F.N.B. pays an annual dividend of $0.52 per share and has a dividend yield of 3.0%. Provident Financial Services pays an annual dividend of $0.96 per share and has a dividend yield of 4.3%. F.N.B. pays out 31.0% of its earnings in the form of a dividend. Provident Financial Services pays out 40.0% 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.

Volatility and Risk

F.N.B. has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Provident Financial Services has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500.

Earnings and Valuation

This table compares F.N.B. and Provident Financial Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
F.N.B.	$1.83 billion	3.30	$565.00 million	$1.68	10.16
Provident Financial Services	$1.38 billion	2.08	$291.16 million	$2.40	9.21

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

Summary

F.N.B. beats Provident Financial Services on 9 of the 17 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 Provident Financial Services

Provident Financial Services, Inc. operates as the bank holding company for Provident Bank that provides various banking products and services to individuals, families, and businesses in the United States. Its deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA products. The company's loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, retail and industrial properties, and office buildings; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, personal loans and unsecured lines of credit, and auto and recreational vehicle loans. It also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, the company provides wealth management services comprising investment management, trust and estate administration, financial planning, and tax compliance and planning. Further, it sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure. The company was founded in 1839 and is headquartered in Jersey City, New Jersey.