Stock Yards Bancorp (NASDAQ:SYBT) versus Farmers National Banc (NASDAQ:FMNB) Critical Review

Farmers National Banc (NASDAQ:FMNB) and Stock Yards Bancorp (NASDAQ:SYBT) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Valuation & Earnings

This table compares Farmers National Banc and Stock Yards Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers National Banc	$279.92 million	3.31	$54.59 million	$1.47	10.65
Stock Yards Bancorp	$564.54 million	4.32	$140.15 million	$5.02	15.65

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

Profitability

This table compares Farmers National Banc and Stock Yards Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmers National Banc	20.52%	12.03%	1.21%
Stock Yards Bancorp	25.41%	13.39%	1.55%

Volatility & Risk

Farmers National Banc has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Stock Yards Bancorp has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Dividends

Farmers National Banc pays an annual dividend of $0.72 per share and has a dividend yield of 4.6%. Stock Yards Bancorp pays an annual dividend of $1.32 per share and has a dividend yield of 1.7%. Farmers National Banc pays out 49.0% of its earnings in the form of a dividend. Stock Yards Bancorp pays out 26.3% 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. Stock Yards Bancorp has raised its dividend for 15 consecutive years.

Analyst Recommendations

This is a summary of current ratings and target prices for Farmers National Banc and Stock Yards Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers National Banc	0	2	1	0	2.33
Stock Yards Bancorp	0	6	1	0	2.14

Farmers National Banc currently has a consensus target price of $16.00, suggesting a potential upside of 2.17%. Stock Yards Bancorp has a consensus target price of $88.00, suggesting a potential upside of 12.02%. Given Stock Yards Bancorp’s higher possible upside, analysts clearly believe Stock Yards Bancorp is more favorable than Farmers National Banc.

Insider and Institutional Ownership

38.7% of Farmers National Banc shares are owned by institutional investors. Comparatively, 56.5% of Stock Yards Bancorp shares are owned by institutional investors. 3.5% of Farmers National Banc shares are owned by company insiders. Comparatively, 2.9% of Stock Yards Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Stock Yards Bancorp beats Farmers National Banc on 12 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 Stock Yards Bancorp

Stock Yards Bancorp, Inc. operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States. It operates in two segments, Commercial Banking, and WM&T. The Commercial Banking segment offers a range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, and other banking services. This segment also provides securities brokerage services through an arrangement with a third party broker-dealer. The WM&T segment provides investment management, financial and retirement planning, and trust and estate services, as well as retirement plan management for businesses and corporations. It provides services in Louisville, central, eastern, and northern Kentucky, as well as Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets. The company was founded in 1904 and is headquartered in Louisville, Kentucky.