Analyzing Western Alliance Bancorporation (NYSE:WAL) and Farmers National Banc (NYSE:FMNB)

Farmers National Banc (NASDAQ:FMNB) and Western Alliance Bancorporation (NYSE:WAL) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Institutional & Insider Ownership

37.1% of Farmers National Banc shares are held by institutional investors. Comparatively, 82.9% of Western Alliance Bancorporation shares are held by institutional investors. 8.7% of Farmers National Banc shares are held by insiders. Comparatively, 7.7% of Western Alliance Bancorporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Farmers National Banc has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Western Alliance Bancorporation has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Farmers National Banc and Western Alliance Bancorporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Farmers National Banc 0 0 2 0 3.00
Western Alliance Bancorporation 0 0 7 0 3.00

Farmers National Banc presently has a consensus target price of $15.25, suggesting a potential upside of 7.32%. Western Alliance Bancorporation has a consensus target price of $60.00, suggesting a potential upside of 30.43%. Given Western Alliance Bancorporation’s higher probable upside, analysts plainly believe Western Alliance Bancorporation is more favorable than Farmers National Banc.

Dividends

Farmers National Banc pays an annual dividend of $0.36 per share and has a dividend yield of 2.5%. Western Alliance Bancorporation does not pay a dividend. Farmers National Banc pays out 31.3% of its earnings in the form of a dividend. Farmers National Banc has increased its dividend for 2 consecutive years.

Valuation & Earnings

This table compares Farmers National Banc and Western Alliance Bancorporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Farmers National Banc $117.26 million 3.37 $32.57 million $1.15 12.36
Western Alliance Bancorporation $1.08 billion 4.46 $435.79 million $4.14 11.11

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

Profitability

This table compares Farmers National Banc and Western Alliance Bancorporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Farmers National Banc 27.42% 12.82% 1.43%
Western Alliance Bancorporation 39.87% 18.18% 2.06%

Summary

Western Alliance Bancorporation beats Farmers National Banc on 12 of the 16 factors compared between the two stocks.

Farmers National Banc Company Profile

Farmers National Banc Corp., through its subsidiaries, operates in the banking, trust, retirement consulting, insurance, and financial management industries. The company 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, MasterCard and Visa credit cards, brokerage, and other services. It also provides personal and corporate trust services in the areas of estate settlement, trust administration, and employee benefit plans; 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 operates in through 39 locations and two-branch locations in southwestern Pennsylvania. Farmers National Banc Corp. was founded in 1887 and is headquartered in Canfield, Ohio.

Western Alliance Bancorporation Company Profile

Western Alliance Bancorporation operates as the holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. The company offers deposit products, including checking accounts, savings accounts, and money market accounts, as well as fixed-rate and fixed maturity certificates of deposit accounts. It also offers commercial and industrial loan products, such as working capital lines of credit, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans; commercial real estate loans, which are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties; construction and land development loans for single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments; and consumer loans. In addition, the company provides other financial services, such as Internet banking, wire transfers, electronic bill payment and presentment, lock box services, courier, and cash management services. Further, it holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. As of December 31, 2018, the company operated 38 branch locations and 11 loan production offices. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona.

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