Analyzing Alerus Financial (NASDAQ:ALRS) and F.N.B. (NYSE:FNB)

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

Analyst Ratings

This is a breakdown of current recommendations for F.N.B. and Alerus Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
F.N.B. 0 2 3 0 2.60
Alerus Financial 0 1 0 0 2.00

F.N.B. currently has a consensus target price of $13.62, indicating a potential upside of 28.71%. Alerus Financial has a consensus target price of $29.00, indicating a potential upside of 26.03%. Given F.N.B.’s stronger consensus rating and higher probable upside, analysts clearly believe F.N.B. is more favorable than Alerus Financial.

Volatility and Risk

F.N.B. has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Alerus Financial has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Valuation and Earnings

This table compares F.N.B. and Alerus Financial’s top-line 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 2.79 $405.00 million $1.10 9.62
Alerus Financial $240.04 million 1.66 $52.68 million $2.69 8.55

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

Dividends

F.N.B. pays an annual dividend of $0.48 per share and has a dividend yield of 4.5%. Alerus Financial pays an annual dividend of $0.64 per share and has a dividend yield of 2.8%. F.N.B. pays out 43.6% of its earnings in the form of a dividend. Alerus Financial pays out 23.8% 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.

Profitability

This table compares F.N.B. and Alerus 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%
Alerus Financial 20.86% 13.52% 1.47%

Institutional and Insider Ownership

71.3% of F.N.B. shares are owned by institutional investors. Comparatively, 39.5% of Alerus Financial shares are owned by institutional investors. 0.9% of F.N.B. shares are owned by company insiders. Comparatively, 6.9% of Alerus Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

F.N.B. beats Alerus Financial 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.

Alerus Financial Company Profile (Get Rating)

Alerus Financial Corporation, through its subsidiary, Alerus Financial, National Association, provides various financial services to businesses and consumers. The company operates in four segments: Banking, Retirement and Benefit Services, Wealth Management, and Mortgage. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. It offers banking services through fourteen offices in North Dakota, Minnesota, and Arizona; and retirement and benefit plans in 50 states through offices located in Michigan, Minnesota, and Colorado. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.

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