Contrasting First Busey (NASDAQ:BUSE) and Farmers National Banc (NASDAQ:FMNB)

Farmers National Banc (NASDAQ:FMNB) and First Busey (NASDAQ:BUSE) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Insider and Institutional Ownership

38.7% of Farmers National Banc shares are held by institutional investors. Comparatively, 56.5% of First Busey shares are held by institutional investors. 3.9% of Farmers National Banc shares are held by insiders. Comparatively, 3.9% of First Busey shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Farmers National Banc and First Busey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmers National Banc	19.57%	13.49%	1.13%
First Busey	11.00%	9.05%	1.11%

Dividends

Farmers National Banc pays an annual dividend of $0.68 per share and has a dividend yield of 5.0%. First Busey pays an annual dividend of $1.04 per share and has a dividend yield of 4.2%. Farmers National Banc pays out 47.2% of its earnings in the form of a dividend. First Busey pays out 90.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. First Busey has increased its dividend for 10 consecutive years. Farmers National Banc is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Farmers National Banc and First Busey, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers National Banc	0	3	1	0	2.25
First Busey	0	4	3	0	2.43

Farmers National Banc currently has a consensus price target of $14.50, suggesting a potential upside of 7.41%. First Busey has a consensus price target of $26.33, suggesting a potential upside of 6.53%. Given Farmers National Banc’s higher probable upside, research analysts clearly believe Farmers National Banc is more favorable than First Busey.

Risk & Volatility

Farmers National Banc has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, First Busey has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.

Earnings & Valuation

This table compares Farmers National Banc and First Busey”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	$269.45 million	1.89	$45.95 million	$1.44	9.38
First Busey	$663.36 million	3.29	$113.69 million	$1.15	21.50

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

Summary

Farmers National Banc beats First Busey on 9 of the 17 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 First Busey

First Busey Corporation operates as the bank holding company for Busey Bank that engages in the provision of retail and commercial banking products and services to individual, corporate, institutional, and governmental customers in the United States. It operates through three segments: Banking, Wealth Management, and FirsTech. The Banking segment provides banking services to individual customers, such as demand and savings deposits, money transfers, safe deposit services, individual retirement accounts and other fiduciary services, automated teller machines, and technology-based networks, as well as loan products, including residential real estate, home equity lines of credit, and consumer loans. This segment also offers banking services to corporate customers, including commercial, commercial real estate, real estate construction, and agricultural loans, as well as cash management services. The Wealth Management segment offers a range of investment and asset management, investment, brokerage, investment strategy consulting, fiduciary, philanthropic advisory, tax preparation, business succession planning, and employee retirement plan services to individuals, businesses, and foundations; and professional farm management services to the agricultural industry. The FirsTech segment provides payment technology solutions comprising online, mobile, and voice-recognition bill payments; money management and credit card networks; direct debit services; lockbox remittance processing for payments made by mail; and walk-in payments, as well as tools to help clients with billing, reconciliation, bill reminders, and treasury services. The company was founded in 1868 and is headquartered in Champaign, Illinois.