Analyzing F.N.B. (NYSE:FNB) and Webster Financial (NYSE:WBS)

F.N.B. (NYSE:FNBGet Rating) and Webster Financial (NYSE:WBSGet Rating) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, institutional ownership, earnings and profitability.

Institutional and Insider Ownership

71.3% of F.N.B. shares are held by institutional investors. Comparatively, 46.0% of Webster Financial shares are held by institutional investors. 0.9% of F.N.B. shares are held by company insiders. Comparatively, 1.9% of Webster Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for F.N.B. and Webster Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
F.N.B. 0 2 3 0 2.60
Webster Financial 0 2 3 1 2.83

F.N.B. currently has a consensus price target of $13.62, indicating a potential upside of 13.76%. Webster Financial has a consensus price target of $66.60, indicating a potential upside of 37.66%. Given Webster Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Webster Financial is more favorable than F.N.B..

Dividends

F.N.B. pays an annual dividend of $0.48 per share and has a dividend yield of 4.0%. Webster Financial pays an annual dividend of $1.60 per share and has a dividend yield of 3.3%. F.N.B. pays out 43.6% of its earnings in the form of a dividend. Webster Financial pays out 51.6% 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. F.N.B. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

F.N.B. has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, Webster Financial has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Valuation and Earnings

This table compares F.N.B. and Webster Financial’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
F.N.B. $1.34 billion 3.15 $405.00 million $1.10 10.88
Webster Financial $1.27 billion 6.86 $408.86 million $3.10 15.61

Webster Financial has lower revenue, but higher earnings than F.N.B.. F.N.B. is trading at a lower price-to-earnings ratio than Webster Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares F.N.B. and Webster Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
F.N.B. 27.34% 8.06% 1.03%
Webster Financial 19.35% 11.74% 1.22%

Summary

Webster Financial beats F.N.B. on 11 of the 16 factors compared between the two stocks.

F.N.B. Company Profile (Get Rating)

F.N.B. Corporation, a financial holding company, provides a range of financial services primarily to consumers, corporations, governments, and small- to medium-sized businesses. The company operates through three segments: Community Banking, Wealth Management, and Insurance. It offers commercial banking solutions, including corporate and small business banking, investment real estate financing, business credit, capital market, and lease financing services. The company also provides consumer banking products and services, such as deposit products, mortgage and consumer lending services, and mobile and online banking services; and wealth management services comprising personal and corporate fiduciary services comprising administration of decedent and trust estates; securities brokerage and investment advisory services, mutual funds, and annuities; and commercial and personal insurance, and reinsurance products, as well as mezzanine financing options for small- to medium-sized businesses. As of December 31, 2021, it operated 334 banking offices in Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, South Carolina, Washington, D.C., and Virginia. F.N.B. Corporation was founded in 1864 and is headquartered in Pittsburgh, Pennsylvania.

Webster Financial Company Profile (Get Rating)

Webster Financial Corporation operates as the bank holding company for Webster Bank, National Association that provides a range of banking, investment, and financial services to individuals, families, and businesses in the United States. It operates through three segments: Commercial Banking, HSA Bank, and Retail Banking. The Commercial Banking segment provides lending, deposit, and cash management services; commercial and industrial lending and leasing, commercial real estate lending, equipment financing, and asset-based lending, as well as treasury and payment services; wealth management solutions to business owners, operators, and consumers; and trust, asset management, financial planning, insurance, retirement, and investment products. The HSA Bank segment offers health savings accounts, health reimbursement arrangements, flexible spending accounts, and commuter services that are distributed directly to employers and individual consumers, as well as through national and regional insurance carriers, consultants, and financial advisors. The Retail Banking segment provides deposit and fee-based services, residential mortgages, home equity lines, secured and unsecured loans, and credit cards to consumers. The company also offers online and mobile banking services. As of December 31, 2021, it operated 130 banking centers and 251 ATMs. The company was founded in 1935 and is headquartered in Stamford, Connecticut.

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