Financial Institutions (NASDAQ: FISI) is one of 211 public companies in the “Commercial Banks” industry, but how does it weigh in compared to its peers? We will compare Financial Institutions to similar businesses based on the strength of its institutional ownership, earnings, analyst recommendations, valuation, risk, profitability and dividends.

Insider & Institutional Ownership

65.4% of Financial Institutions shares are owned by institutional investors. Comparatively, 46.4% of shares of all “Commercial Banks” companies are owned by institutional investors. 5.5% of Financial Institutions shares are owned by company insiders. Comparatively, 11.7% of shares of all “Commercial Banks” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Financial Institutions and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Financial Institutions 0 2 1 0 2.33
Financial Institutions Competitors 361 2851 2309 66 2.37

Financial Institutions presently has a consensus target price of $32.25, suggesting a potential upside of 7.14%. As a group, “Commercial Banks” companies have a potential upside of 9.13%. Given Financial Institutions’ peers stronger consensus rating and higher probable upside, analysts clearly believe Financial Institutions has less favorable growth aspects than its peers.

Dividends

Financial Institutions pays an annual dividend of $0.84 per share and has a dividend yield of 2.8%. Financial Institutions pays out 41.8% of its earnings in the form of a dividend. As a group, “Commercial Banks” companies pay a dividend yield of 1.9% and pay out 35.0% of their earnings in the form of a dividend.

Volatility and Risk

Financial Institutions has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, Financial Institutions’ peers have a beta of 0.74, meaning that their average stock price is 26% less volatile than the S&P 500.

Earnings & Valuation

This table compares Financial Institutions and its peers revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Financial Institutions $150.99 million $31.93 million 14.98
Financial Institutions Competitors $341.18 million $71.82 million 20.95

Financial Institutions’ peers have higher revenue and earnings than Financial Institutions. Financial Institutions is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Financial Institutions and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Financial Institutions 19.46% 9.66% 0.81%
Financial Institutions Competitors 20.70% 8.82% 0.94%

Summary

Financial Institutions peers beat Financial Institutions on 11 of the 15 factors compared.

About Financial Institutions

Financial Institutions, Inc. is a financial holding company. The Company conducts its business through its subsidiaries: Five Star Bank (the Bank), a New York chartered bank; Scott Danahy Naylon, LLC (SDN), a full service insurance agency, and Courier Capital, LLC (Courier Capital), an investment advisory and wealth management company. The Company operates through two segments: Banking and Non-Banking. The Banking segment includes all of the Company’s retail and commercial banking operations. The Non-Banking segment includes the activities of SDN and Courier Capital. The Company offers a range of banking and related financial services to consumer, commercial and municipal customers through its bank and nonbank subsidiaries. The Company’s indirect lending network includes relationships with franchised automobile dealers in Western and Central New York, the Capital District of New York and Northern and Central Pennsylvania.

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