Peoples Financial Services (NASDAQ:PFIS – Get Rating) and FNCB Bancorp (NASDAQ:FNCB – Get Rating) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.
Volatility and Risk
Peoples Financial Services has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, FNCB Bancorp has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500.
Valuation and Earnings
This table compares Peoples Financial Services and FNCB Bancorp’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Peoples Financial Services | $108.28 million | 2.84 | $38.09 million | $5.00 | 8.61 |
| FNCB Bancorp | $68.76 million | 1.73 | $20.44 million | $0.95 | 6.35 |
Profitability
This table compares Peoples Financial Services and FNCB Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Peoples Financial Services | 27.07% | 11.94% | 1.06% |
| FNCB Bancorp | 25.30% | 15.55% | 1.08% |
Analyst Ratings
This is a summary of recent ratings and target prices for Peoples Financial Services and FNCB Bancorp, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Peoples Financial Services | 0 | 1 | 0 | 0 | 2.00 |
| FNCB Bancorp | 0 | 0 | 0 | 0 | N/A |
Peoples Financial Services presently has a consensus price target of $56.00, indicating a potential upside of 30.14%. Given Peoples Financial Services’ higher probable upside, equities analysts clearly believe Peoples Financial Services is more favorable than FNCB Bancorp.
Dividends
Peoples Financial Services pays an annual dividend of $1.64 per share and has a dividend yield of 3.8%. FNCB Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 6.0%. Peoples Financial Services pays out 32.8% of its earnings in the form of a dividend. FNCB Bancorp pays out 37.9% 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. Peoples Financial Services has raised its dividend for 7 consecutive years and FNCB Bancorp has raised its dividend for 3 consecutive years.
Institutional and Insider Ownership
30.6% of Peoples Financial Services shares are owned by institutional investors. Comparatively, 12.8% of FNCB Bancorp shares are owned by institutional investors. 3.3% of Peoples Financial Services shares are owned by insiders. Comparatively, 18.0% of FNCB Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Summary
Peoples Financial Services beats FNCB Bancorp on 10 of the 15 factors compared between the two stocks.
About Peoples Financial Services
Peoples Financial Services Corp. is a bank holding company, which engages in the provision of financial services through its wholly-owned subsidiary, Peoples Security Bank and Trust Company. Its loan portfolio includes commercial and retail. The company was founded on February 6, 1986 and is headquartered in Scranton, PA.
About FNCB Bancorp
FNCB Bancorp, Inc. operates as the bank holding company for FNCB Bank that provides retail and commercial banking services to individuals, businesses, local governments, and municipalities in Northeastern Pennsylvania. The company offers checking, savings, money market, and certificate of deposit products. It also provides residential mortgage loans, and home equity term loans and lines of credit; construction, land acquisition, and development loans; commercial real estate loans; commercial and industrial loans, including lines of credit, dealer floor plan lines, equipment loans, vehicle loans, and term loans; consumer loans, such as secured and unsecured installment loans, automobile financing, lines of credit, and overdraft protection loans; state and political subdivision loans and leases; and purchased loans. In addition, the company offers debit cards; mobile and telephone banking, check imaging, and electronic statement services; remote deposit capture, merchant, treasury, and purchasing card services; and wealth management services. The company was formerly known as First National Community Bancorp, Inc. and changed its name to FNCB Bancorp, Inc. in October 2016. FNCB Bancorp, Inc. was founded in 1910 and is headquartered in Dunmore, Pennsylvania.
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