Reviewing Prosperity Bancshares (NYSE:PB) & F.N.B. (NYSE:FNB)

Prosperity Bancshares (NYSE:PB) and F.N.B. (NYSE:FNB) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, profitability, risk, analyst recommendations, dividends and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations for Prosperity Bancshares and F.N.B., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prosperity Bancshares	2	7	5	0	2.21
F.N.B.	0	2	4	1	2.86

Prosperity Bancshares currently has a consensus price target of $78.36, indicating a potential upside of 10.42%. F.N.B. has a consensus price target of $20.75, indicating a potential upside of 13.62%. Given F.N.B.’s stronger consensus rating and higher possible upside, analysts plainly believe F.N.B. is more favorable than Prosperity Bancshares.

Volatility and Risk

Prosperity Bancshares has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, F.N.B. has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500.

Dividends

Prosperity Bancshares pays an annual dividend of $2.40 per share and has a dividend yield of 3.4%. F.N.B. pays an annual dividend of $0.52 per share and has a dividend yield of 2.8%. Prosperity Bancshares pays out 41.6% of its earnings in the form of a dividend. F.N.B. pays out 31.0% 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. Prosperity Bancshares has increased its dividend for 27 consecutive years. Prosperity Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Prosperity Bancshares and F.N.B.”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prosperity Bancshares	$1.74 billion	4.12	$542.84 million	$5.77	12.30
F.N.B.	$2.69 billion	2.39	$565.00 million	$1.68	10.87

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

Institutional and Insider Ownership

80.7% of Prosperity Bancshares shares are owned by institutional investors. Comparatively, 79.2% of F.N.B. shares are owned by institutional investors. 4.0% of Prosperity Bancshares shares are owned by insiders. Comparatively, 1.5% of F.N.B. shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Prosperity Bancshares	29.95%	7.39%	1.43%
F.N.B.	22.29%	9.10%	1.22%

Summary

Prosperity Bancshares beats F.N.B. on 10 of the 18 factors compared between the two stocks.

About Prosperity Bancshares

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; term loans and lines of credit; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. The company was incorporated in 1983 and is headquartered in Houston, Texas.

About F.N.B.

F.N.B. Corporation, a bank and financial holding company, provides a range of financial products and services primarily to consumers, corporations, governments, and small- to medium-sized businesses in the United States. The company operates through three segments: Community Banking, Wealth Management, and Insurance. The Community Banking segment offers commercial and consumer banking services, including corporate and small business banking, investment real estate financing, business credit, capital market, and lease financing services. It also provides consumer banking products and services, such as deposit products, mortgage and consumer lending services, and mobile and online banking services. The Wealth Management segment provides personal and corporate fiduciary services comprising administration of decedent and trust estates; and securities brokerage and investment advisory services, mutual funds, and annuities. The Insurance segment comprises commercial and personal insurance, and reinsurance products, as well as mezzanine financing options for small- to medium-sized businesses. The company operates community banking branches 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.