Head to Head Comparison: Farmers National Banc (NASDAQ:FMNB) and ConnectOne Bancorp (NASDAQ:CNOB)

Farmers National Banc (NASDAQ:FMNB) and ConnectOne Bancorp (NASDAQ:CNOB) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Risk and Volatility

Farmers National Banc has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, ConnectOne Bancorp has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500.

Profitability

This table compares Farmers National Banc and ConnectOne Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmers National Banc	21.05%	15.68%	1.15%
ConnectOne Bancorp	15.29%	7.39%	0.83%

Insider & Institutional Ownership

38.7% of Farmers National Banc shares are held by institutional investors. Comparatively, 67.7% of ConnectOne Bancorp shares are held by institutional investors. 4.0% of Farmers National Banc shares are held by insiders. Comparatively, 6.4% of ConnectOne Bancorp shares are held 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.

Dividends

Farmers National Banc pays an annual dividend of $0.68 per share and has a dividend yield of 5.2%. ConnectOne Bancorp pays an annual dividend of $0.72 per share and has a dividend yield of 3.6%. Farmers National Banc pays out 46.9% of its earnings in the form of a dividend. ConnectOne Bancorp pays out 38.1% 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. Farmers National Banc has increased its dividend for 8 consecutive years. Farmers National Banc is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Farmers National Banc and ConnectOne Bancorp’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers National Banc	$255.20 million	1.94	$49.93 million	$1.45	9.10
ConnectOne Bancorp	$504.07 million	1.51	$87.00 million	$1.89	10.54

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Farmers National Banc and ConnectOne Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers National Banc	0	2	1	0	2.33
ConnectOne Bancorp	0	1	2	1	3.00

Farmers National Banc presently has a consensus target price of $15.33, indicating a potential upside of 16.25%. ConnectOne Bancorp has a consensus target price of $24.00, indicating a potential upside of 20.48%. Given ConnectOne Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe ConnectOne Bancorp is more favorable than Farmers National Banc.

Summary

ConnectOne Bancorp beats Farmers National Banc on 12 of the 18 factors compared between the two stocks.

About Farmers National Banc

Farmers National Banc Corp. operates as a bank holding company for The Farmers National Bank of Canfield engages in the banking, trust, retirement consulting, insurance, and financial management businesses. It 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, brokerage, and other services. The company also provides personal and corporate trust services in the areas of estate settlement, trust administration, employee benefit plans, and 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 was founded in 1887 and is headquartered in Canfield, Ohio.

About ConnectOne Bancorp

ConnectOne Bancorp, Inc. operates as the bank holding company for ConnectOne Bank that provides commercial banking products and services for small and mid-sized businesses, local professionals, and individuals in the New York Metropolitan area and South Florida market. The company offers personal and business checking, money market, and time and savings accounts; credit cards, wire transfers, safe deposit boxes, automated teller services and telephone, and internet and mobile banking. It provides retirement accounts, consumers and cash management services for business clients, including treasury direct, automated clearing house, remote deposit capture, and digital invoicing. In addition, the company offers consumer and commercial business loans, including lines of credit, commercial and residential mortgages, home equity and bridge loans, and other personal loans; commercial loans secured by collateral, such as business assets comprising accounts receivable, inventory and equipment, and mortgages filed on commercial and residential real estate, as well as cash balances and marketable securities. Further, it provides real estate loans, which includes loans secured by first liens on completed commercial properties, including multi-family properties, to purchase or refinance properties; residential mortgages, such as loans secured by first liens on 1-4 family and condominium; and cooperative residential real estate loans. The company was formerly known as Center Bancorp, Inc. and changed its name to ConnectOne Bancorp, Inc. in July 2014. ConnectOne Bancorp, Inc. was incorporated in 1982 and is headquartered in Englewood Cliffs, New Jersey.