Critical Survey: Farmers National Banc (NASDAQ:FMNB) & Stock Yards Bancorp (NASDAQ:SYBT)

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

Institutional & Insider Ownership

56.5% of Stock Yards Bancorp shares are held by institutional investors. Comparatively, 38.7% of Farmers National Banc shares are held by institutional investors. 2.9% of Stock Yards Bancorp shares are held by company insiders. Comparatively, 3.5% of Farmers National Banc shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Stock Yards Bancorp and Farmers National Banc, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stock Yards Bancorp	0	6	1	0	2.14
Farmers National Banc	0	2	1	0	2.33

Stock Yards Bancorp currently has a consensus price target of $88.00, indicating a potential upside of 12.36%. Farmers National Banc has a consensus price target of $16.00, indicating a potential upside of 1.98%. Given Stock Yards Bancorp’s higher probable upside, research analysts plainly believe Stock Yards Bancorp is more favorable than Farmers National Banc.

Earnings and Valuation

This table compares Stock Yards Bancorp and Farmers National Banc”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stock Yards Bancorp	$415.10 million	5.86	$140.15 million	$5.02	15.60
Farmers National Banc	$279.92 million	3.32	$54.59 million	$1.47	10.67

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

Profitability

This table compares Stock Yards Bancorp and Farmers National Banc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stock Yards Bancorp	25.41%	13.39%	1.55%
Farmers National Banc	20.52%	12.03%	1.21%

Risk & Volatility

Stock Yards Bancorp has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Farmers National Banc has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Dividends

Stock Yards Bancorp pays an annual dividend of $1.32 per share and has a dividend yield of 1.7%. Farmers National Banc pays an annual dividend of $0.72 per share and has a dividend yield of 4.6%. Stock Yards Bancorp pays out 26.3% of its earnings in the form of a dividend. Farmers National Banc pays out 49.0% 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. Stock Yards Bancorp has increased its dividend for 15 consecutive years.

Summary

Stock Yards Bancorp beats Farmers National Banc on 12 of the 16 factors compared between the two stocks.

About Stock Yards Bancorp

Stock Yards Bancorp, Inc. operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States. It operates in two segments, Commercial Banking, and WM&T. The Commercial Banking segment offers a range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, and other banking services. This segment also provides securities brokerage services through an arrangement with a third party broker-dealer. The WM&T segment provides investment management, financial and retirement planning, and trust and estate services, as well as retirement plan management for businesses and corporations. It provides services in Louisville, central, eastern, and northern Kentucky, as well as Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets. The company was founded in 1904 and is headquartered in Louisville, Kentucky.

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.