Financial Contrast: Lakeland Financial (NASDAQ:LKFN) vs. Farmers National Banc (NASDAQ:FMNB)

Farmers National Banc (NASDAQ:FMNB) and Lakeland Financial (NASDAQ:LKFN) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Risk and Volatility

Farmers National Banc has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Lakeland Financial has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Institutional and Insider Ownership

38.7% of Farmers National Banc shares are owned by institutional investors. Comparatively, 81.2% of Lakeland Financial shares are owned by institutional investors. 3.5% of Farmers National Banc shares are owned by insiders. Comparatively, 3.0% of Lakeland Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Farmers National Banc pays an annual dividend of $0.68 per share and has a dividend yield of 4.8%. Lakeland Financial pays an annual dividend of $2.08 per share and has a dividend yield of 3.5%. Farmers National Banc pays out 46.9% of its earnings in the form of a dividend. Lakeland Financial pays out 48.7% 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. Lakeland Financial has increased its dividend for 14 consecutive years. Farmers National Banc is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations for Farmers National Banc and Lakeland Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers National Banc	0	2	1	0	2.33
Lakeland Financial	0	3	1	0	2.25

Farmers National Banc presently has a consensus price target of $16.00, indicating a potential upside of 13.15%. Lakeland Financial has a consensus price target of $66.50, indicating a potential upside of 11.02%. Given Farmers National Banc’s stronger consensus rating and higher probable upside, equities analysts clearly believe Farmers National Banc is more favorable than Lakeland Financial.

Valuation & Earnings

This table compares Farmers National Banc and Lakeland Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers National Banc	$279.92 million	2.99	$54.59 million	$1.45	9.75
Lakeland Financial	$421.71 million	3.54	$103.36 million	$4.27	14.03

Lakeland Financial has higher revenue and earnings than Farmers National Banc. Farmers National Banc is trading at a lower price-to-earnings ratio than Lakeland Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Farmers National Banc and Lakeland Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmers National Banc	19.55%	11.99%	1.13%
Lakeland Financial	25.81%	14.79%	1.57%

Summary

Lakeland Financial beats Farmers National Banc on 10 of the 16 factors compared between the two stocks.

About Farmers National Banc

Farmers National Banc Corp. operates as a bank holding company for The Farmers National Bank of Canfield engages in the banking, trust, retirement consulting, insurance, and financial management businesses. It offers commercial and retail banking services, including checking, savings, and time deposit accounts; commercial, mortgage and installment, and home equity loans; home equity lines of credit, night depository, safe deposit box, money order, bank check, automated teller machine, Internet banking, travel card, E bond transaction, brokerage, and other services. The company also provides personal and corporate trust services in the areas of estate settlement, trust administration, employee benefit plans, and retirement services; property and casualty insurance products and services; and various insurance products through licensed representatives, as well as invests in municipal securities. The company was founded in 1887 and is headquartered in Canfield, Ohio.

About Lakeland Financial

Lakeland Financial Corporation operates as the bank holding company for Lake City Bank that provides various banking products and services in the United States. The company accepts various deposit products, such as noninterest bearing, interest-bearing checking, savings, money market, NOW, and demand deposits. Its loan products include commercial and industrial, commercial real estate and multi-family residential, construction, agri-business and agricultural, consumer 1-4 family mortgage, and other commercial and consumer loans. The company also provides retail and merchant credit card services; corporate treasury management, wealth advisory, and trust services; retail brokerage services, including various financial and investment products, such as annuities and life insurance; and mobile business banking and on-line treasury management services. It serves commercial real estate, manufacturing, agriculture, construction, retail, wholesale, finance and insurance, accommodation and food services, and health care industries. The company was founded in 1872 and is headquartered in Warsaw, Indiana.