Critical Review: F.N.B. (NYSE:FNB) versus C&F Financial (NASDAQ:CFFI)

C&F Financial (NASDAQ:CFFI) and F.N.B. (NYSE:FNB) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Dividends

C&F Financial pays an annual dividend of $1.84 per share and has a dividend yield of 2.9%. F.N.B. pays an annual dividend of $0.48 per share and has a dividend yield of 3.0%. C&F Financial pays out 27.5% of its earnings in the form of a dividend. F.N.B. pays out 38.1% 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. C&F Financial has increased its dividend for 1 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
C&F Financial	12.56%	9.59%	0.85%
F.N.B.	17.78%	7.97%	1.03%

Valuation & Earnings

This table compares C&F Financial and F.N.B.”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
C&F Financial	$125.53 million	1.65	$19.83 million	$6.68	9.60
F.N.B.	$2.57 billion	2.23	$465.00 million	$1.26	12.62

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

Insider and Institutional Ownership

37.2% of C&F Financial shares are held by institutional investors. Comparatively, 79.3% of F.N.B. shares are held by institutional investors. 6.3% of C&F Financial shares are held by insiders. Comparatively, 1.4% of F.N.B. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for C&F Financial and F.N.B., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
C&F Financial	0	0	0	0	0.00
F.N.B.	0	0	7	0	3.00

F.N.B. has a consensus target price of $18.00, suggesting a potential upside of 13.17%. Given F.N.B.’s stronger consensus rating and higher probable upside, analysts plainly believe F.N.B. is more favorable than C&F Financial.

Volatility and Risk

C&F Financial has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, F.N.B. has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Summary

F.N.B. beats C&F Financial on 12 of the 17 factors compared between the two stocks.

About C&F Financial

C&F Financial Corp. is a bank holding company, which engages in the provision of banking services to individuals and businesses. It operates through the following segments: Community Banking, Mortgage Banking and Consumer Finance. The Community Banking segment provides checking and savings deposit accounts, business, real estate, development, mortgage, home equity, and installment loans. The Mortgage Banking segment offers ancillary mortgage loan origination services for loan settlement and residential appraisals. The Consumer Finance segment consists of automobile financing through lending programs that are designed to serve customers in the non-prime market who have limited access to traditional automobile financing. The company was founded on March 8, 1994 and is headquartered in Toano, VA.

About F.N.B.

F.N.B. Corporation, a bank and financial holding company, provides a range of financial products and services primarily to consumers, corporations, governments, and small- to medium-sized businesses in the United States. The company operates through three segments: Community Banking, Wealth Management, and Insurance. The Community Banking segment offers commercial and consumer banking services, including corporate and small business banking, investment real estate financing, business credit, capital market, and lease financing services. It also provides consumer banking products and services, such as deposit products, mortgage and consumer lending services, and mobile and online banking services. The Wealth Management segment provides personal and corporate fiduciary services comprising administration of decedent and trust estates; and securities brokerage and investment advisory services, mutual funds, and annuities. The Insurance segment comprises commercial and personal insurance, and reinsurance products, as well as mezzanine financing options for small- to medium-sized businesses. The company operates community banking branches in Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, South Carolina, Washington, D.C., and Virginia. F.N.B. Corporation was founded in 1864 and is headquartered in Pittsburgh, Pennsylvania.