Contrasting FB Financial (NYSE:FBK) and Shore Bancshares (NASDAQ:SHBI)

FB Financial (NYSE:FBK) and Shore Bancshares (NASDAQ:SHBI) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, dividends and analyst recommendations.

Insider and Institutional Ownership

65.4% of FB Financial shares are held by institutional investors. Comparatively, 59.8% of Shore Bancshares shares are held by institutional investors. 2.0% of FB Financial shares are held by company insiders. Comparatively, 8.7% of Shore Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

FB Financial pays an annual dividend of $0.84 per share and has a dividend yield of 1.6%. Shore Bancshares pays an annual dividend of $0.56 per share and has a dividend yield of 2.5%. FB Financial pays out 18.7% of its earnings in the form of a dividend. Shore Bancshares pays out 27.3% 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. FB Financial has increased its dividend for 8 consecutive years.

Profitability

This table compares FB Financial and Shore Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FB Financial	22.62%	12.32%	1.44%
Shore Bancshares	19.69%	12.34%	1.20%

Earnings and Valuation

This table compares FB Financial and Shore Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FB Financial	$701.34 million	3.81	$122.62 million	$4.50	11.89
Shore Bancshares	$342.72 million	2.21	$59.51 million	$2.05	11.07

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

Risk & Volatility

FB Financial has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Shore Bancshares has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for FB Financial and Shore Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FB Financial	0	0	6	1	3.14
Shore Bancshares	0	3	3	0	2.50

FB Financial currently has a consensus price target of $64.43, indicating a potential upside of 20.40%. Shore Bancshares has a consensus price target of $25.62, indicating a potential upside of 12.94%. Given FB Financial’s stronger consensus rating and higher possible upside, equities research analysts plainly believe FB Financial is more favorable than Shore Bancshares.

Summary

FB Financial beats Shore Bancshares on 15 of the 18 factors compared between the two stocks.

About FB Financial

FB Financial Corporation operates as a bank holding company for FirstBank that provides a suite of commercial and consumer banking services to businesses, professionals, and individuals. The company operates in segments, such as Banking and Mortgage. It offers checking, demand, money market, and savings accounts; deposit and lending products and services to corporate, commercial, and consumer customers; and time deposits and certificates of deposits, as well as residential mortgage loans. The company also provides owner-occupied and non-owner-occupied real estate commercial, residential real estate 1-4 family mortgage, multi-family residential, commercial and industrial, construction, land acquisition, residential lines of credit, and land development loans; and consumer and other loans, such as car, boat, and other recreational vehicle loans, as well as manufactured homes without real estate and personal lines of credit. In addition, the company offers mortgage banking services through its bank branch network and mortgage banking offices in the southeastern United States; direct-to-consumer internet delivery channel; and trust, insurance, and investment services, as well as online and mobile banking services. The company operates full-service bank branches and limited-service branches locations throughout Tennessee, Nashville, Chattanooga, Knoxville, Memphis, Jackson, Birmingham, Florence, Huntsville, Alabama, Bowling Green, and Kentucky; and mortgage offices throughout the southeastern United States. The company was formerly known as First South Bancorp, Inc. and changed its name to FB Financial Corporation in 2016. FB Financial Corporation was founded in 1906 and is headquartered in Nashville, Tennessee.

About Shore Bancshares

Shore Bancshares, Inc. operates as a bank holding company for the Shore United Bank, N.A. that provides various commercial and consumer banking products and services to individuals, businesses, and other organizations. It offers checking, savings, overnight investment sweep, and money market accounts; and regular and IRA certificates of deposit, as well as CDARS programs and cash management services. The company also provides commercial loans, such as secured and unsecured loans, working capital loans, lines of credit, term loans, accounts receivable financing, real estate acquisition and development loans, construction loans, and letters of credit; residential real estate construction loans; residential mortgage loans; and loans to consumers, including home equity, automobile, installment, home improvement, and personal lines of credit, as well as other consumer financing products. In addition, it offers trust, asset management, and financial planning services; treasury management services, such as merchant card processing, remote deposit capture, and ACH origination, as well as telephone, mobile, and Internet banking services; safe deposit boxes; debit and credit cards; and automatic teller machine services. Shore Bancshares, Inc. was founded in 1876 and is headquartered in Easton, Maryland.