F.N.B. (NYSE:FNB) and City (NASDAQ:CHCO) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, earnings, risk, dividends, analyst recommendations, institutional ownership and valuation.

Profitability

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

Net Margins Return on Equity Return on Assets
F.N.B. 19.91% 7.70% 1.05%
City 29.49% 13.85% 1.65%

Earnings & Valuation

This table compares F.N.B. and City’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
F.N.B. $1.23 billion 3.40 $199.20 million $0.93 13.88
City $206.54 million 5.65 $54.31 million $3.94 19.17

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

Insider and Institutional Ownership

80.9% of F.N.B. shares are owned by institutional investors. Comparatively, 66.9% of City shares are owned by institutional investors. 0.6% of F.N.B. shares are owned by company insiders. Comparatively, 3.8% of City shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

F.N.B. has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, City has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Dividends

F.N.B. pays an annual dividend of $0.48 per share and has a dividend yield of 3.7%. City pays an annual dividend of $1.84 per share and has a dividend yield of 2.4%. F.N.B. pays out 51.6% of its earnings in the form of a dividend. City pays out 46.7% 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. City has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for F.N.B. and City, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
F.N.B. 0 3 4 0 2.57
City 0 3 1 0 2.25

F.N.B. presently has a consensus target price of $16.60, suggesting a potential upside of 28.58%. City has a consensus target price of $74.50, suggesting a potential downside of 1.38%. Given F.N.B.’s stronger consensus rating and higher possible upside, research analysts plainly believe F.N.B. is more favorable than City.

Summary

City beats F.N.B. on 9 of the 17 factors compared between the two stocks.

About F.N.B.

F.N.B. Corporation, a financial holding company, provides a range of financial services primarily to consumers, corporations, governments, and small- to medium-sized businesses. The company operates through four segments: Community Banking, Wealth Management, Insurance, and Consumer Finance. It offers commercial banking solutions, including corporate and small business banking, investment real estate financing, business credit, capital market, and lease financing services. The company also provides consumer banking products and services, such as deposit products, mortgage and consumer lending services, and mobile and online banking services; and wealth management services comprising asset management, private banking, and insurance services. As of December 31, 2017, it operated 417 community banking offices in Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, and South Carolina; and 77 consumer finance offices in Pennsylvania, Ohio, Tennessee, and Kentucky. F.N.B. Corporation was founded in 1864 and is headquartered in Pittsburgh, Pennsylvania.

About City

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust and investment management, and other financial solutions in the United States. The company accepts various deposit products, such as checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of a residence; first-lien home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, production of conventional and government insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, and debit card services. As of January 31, 2018, the company operated through a network of 86 branches in West Virginia, Virginia, Kentucky, and Ohio. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.

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