Critical Review: Lloyds Banking Group (NYSE:LYG) & First Mid Bancshares (NASDAQ:FMBH)

First Mid Bancshares (NASDAQ:FMBH) and Lloyds Banking Group (NYSE:LYG) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Analyst Ratings

This is a summary of current ratings and recommmendations for First Mid Bancshares and Lloyds Banking Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Mid Bancshares	0	3	3	0	2.50
Lloyds Banking Group	0	3	8	0	2.73

First Mid Bancshares currently has a consensus price target of $54.62, suggesting a potential upside of 12.13%. Given First Mid Bancshares’ higher probable upside, equities research analysts plainly believe First Mid Bancshares is more favorable than Lloyds Banking Group.

Risk & Volatility

First Mid Bancshares has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, Lloyds Banking Group has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500.

Profitability

This table compares First Mid Bancshares and Lloyds Banking Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Mid Bancshares	19.76%	10.86%	1.29%
Lloyds Banking Group	24.97%	10.94%	0.54%

Earnings and Valuation

This table compares First Mid Bancshares and Lloyds Banking Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Mid Bancshares	$466.04 million	2.78	$91.75 million	$4.03	12.09
Lloyds Banking Group	$25.61 billion	3.20	$6.14 billion	$0.43	13.13

Lloyds Banking Group has higher revenue and earnings than First Mid Bancshares. First Mid Bancshares is trading at a lower price-to-earnings ratio than Lloyds Banking Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

47.6% of First Mid Bancshares shares are held by institutional investors. Comparatively, 2.1% of Lloyds Banking Group shares are held by institutional investors. 6.0% of First Mid Bancshares shares are held by company insiders. Comparatively, 0.0% of Lloyds Banking Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

First Mid Bancshares pays an annual dividend of $1.04 per share and has a dividend yield of 2.1%. Lloyds Banking Group pays an annual dividend of $0.17 per share and has a dividend yield of 3.0%. First Mid Bancshares pays out 25.8% of its earnings in the form of a dividend. Lloyds Banking Group pays out 39.5% 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. First Mid Bancshares has raised its dividend for 3 consecutive years.

Summary

Lloyds Banking Group beats First Mid Bancshares on 10 of the 17 factors compared between the two stocks.

About First Mid Bancshares

First Mid Bancshares, Inc., a financial holding company, provides community banking products and services to commercial, retail, and agricultural customers in the United States. It accepts various deposit products, such as demand deposits, savings accounts, money market deposits, and time deposits. The company’s loan products include commercial real estate, commercial and industrial, agricultural and agricultural real estate, residential real estate, and consumer loans, as well as construction and land development, 1-4 family residential properties, and multifamily residential properties loans; and other loans comprising loans to municipalities to support community projects, such as infrastructure improvements or equipment purchases. It also offers wealth management services, which include estate planning, investment, and farm management and brokerage services for individuals; employee benefit services for businesses; and farm management and brokerage services. In addition, the company provides property and casualty, senior insurance products, and group medical insurance for businesses; and personal lines insurance to individuals. The company was formerly known as First Mid-Illinois Bancshares, Inc. and changed its name to First Mid Bancshares, Inc. in April 2019. First Mid Bancshares, Inc. was founded in 1865 and is headquartered in Mattoon, Illinois.

About Lloyds Banking Group

Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom and internationally. It operates in three segments: Retail; Commercial Banking; and Insurance, Pensions and Investments. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, and debt financing services to small and medium-sized entities, corporates, and institutions. The Insurance, Pensions, and Investments segment offers insurance, investment, and pension management products and services. It also provides digital banking services. The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, Scottish Widows, MBNA, Schroders Personal Wealth, Black Horse, Lex Autolease, Birmingham Midshires, LDC, AMC, Embark Group, Citra, IWeb, Cavendish Online, and Tusker brand names. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.