ServisFirst Bancshares (NASDAQ:SFBS) and Farmers National Banc (NASDAQ:FMNB) Financial Contrast

ServisFirst Bancshares (NASDAQ:SFBS) and Farmers National Banc (NASDAQ:FMNB) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.

Analyst Ratings

This is a summary of current ratings for ServisFirst Bancshares and Farmers National Banc, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServisFirst Bancshares	0	1	0	0	2.00
Farmers National Banc	0	2	1	0	2.33

ServisFirst Bancshares currently has a consensus price target of $64.00, indicating a potential downside of 0.19%. Farmers National Banc has a consensus price target of $15.33, indicating a potential upside of 21.60%. Given Farmers National Banc’s stronger consensus rating and higher probable upside, analysts plainly believe Farmers National Banc is more favorable than ServisFirst Bancshares.

Insider & Institutional Ownership

67.3% of ServisFirst Bancshares shares are owned by institutional investors. Comparatively, 38.7% of Farmers National Banc shares are owned by institutional investors. 7.4% of ServisFirst Bancshares shares are owned by insiders. Comparatively, 4.0% of Farmers National Banc shares are owned by 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.

Valuation and Earnings

This table compares ServisFirst Bancshares and Farmers National Banc’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ServisFirst Bancshares	$843.66 million	4.14	$206.85 million	$3.65	17.57
Farmers National Banc	$255.20 million	1.86	$49.93 million	$1.45	8.70

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ServisFirst Bancshares	22.31%	14.65%	1.32%
Farmers National Banc	21.05%	15.68%	1.15%

Dividends

ServisFirst Bancshares pays an annual dividend of $1.20 per share and has a dividend yield of 1.9%. Farmers National Banc pays an annual dividend of $0.68 per share and has a dividend yield of 5.4%. ServisFirst Bancshares pays out 32.9% of its earnings in the form of a dividend. Farmers National Banc pays out 46.9% 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. ServisFirst Bancshares has raised its dividend for 9 consecutive years and Farmers National Banc has raised its dividend for 8 consecutive years.

Volatility & Risk

ServisFirst Bancshares has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500. Comparatively, Farmers National Banc has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Summary

ServisFirst Bancshares beats Farmers National Banc on 12 of the 17 factors compared between the two stocks.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.

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.