Reviewing First Citizens BancShares (FCNCA) & Astoria Financial (NYSE:AF)

First Citizens BancShares (NASDAQ: FCNCA) and Astoria Financial (NYSE:AF) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Insider and Institutional Ownership

44.9% of First Citizens BancShares shares are held by institutional investors. Comparatively, 83.6% of Astoria Financial shares are held by institutional investors. 19.4% of First Citizens BancShares shares are held by insiders. Comparatively, 9.8% of Astoria Financial 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.

Profitability

This table compares First Citizens BancShares and Astoria Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Citizens BancShares 20.11% 10.86% 1.01%
Astoria Financial 19.90% 3.91% 0.51%

Valuation & Earnings

This table compares First Citizens BancShares and Astoria Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Citizens BancShares $1.61 billion 3.21 $323.75 million $26.95 15.99
Astoria Financial N/A N/A N/A $0.57 37.72

First Citizens BancShares has higher revenue and earnings than Astoria Financial. First Citizens BancShares is trading at a lower price-to-earnings ratio than Astoria Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and target prices for First Citizens BancShares and Astoria Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Citizens BancShares 0 0 0 0 N/A
Astoria Financial 0 2 1 0 2.33

Astoria Financial has a consensus price target of $22.00, suggesting a potential upside of 2.33%. Given Astoria Financial’s higher possible upside, analysts clearly believe Astoria Financial is more favorable than First Citizens BancShares.

Dividends

First Citizens BancShares pays an annual dividend of $1.40 per share and has a dividend yield of 0.3%. Astoria Financial pays an annual dividend of $0.16 per share and has a dividend yield of 0.7%. First Citizens BancShares pays out 5.2% of its earnings in the form of a dividend. Astoria Financial pays out 28.1% 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.

Risk and Volatility

First Citizens BancShares has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Astoria Financial has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Summary

First Citizens BancShares beats Astoria Financial on 8 of the 13 factors compared between the two stocks.

First Citizens BancShares Company Profile

First Citizens BancShares, Inc. (BancShares) is a holding company of First-Citizens Bank & Trust Company (FCB). As of December 31, 2016, BancShares operated in 21 states providing a range of financial services to individuals, businesses and professionals. FCB offers a range of retail and commercial banking services. Its loan services include various types of commercial, business and consumer lending. Its deposit services include checking, savings, money market and time deposit accounts. FCB also provides mortgage lending, a full-service trust department, wealth management services for businesses and individuals and other activities incidental to commercial banking. FCB’s subsidiaries, First Citizens Investor Services, Inc. and First Citizens Asset Management, Inc., provide various investment products, including annuities, discount brokerage services and third-party mutual funds to customers primarily through the bank’s branch network, as well as investment advisory services.

Astoria Financial Company Profile

Astoria Financial Corporation is a unitary savings and loan holding company. The Company’s principal business is the operation of its subsidiary, Astoria Bank. Astoria Bank’s primary business is attracting retail deposits from the general public and businesses and investing those deposits, together with funds generated from operations, principal repayments on loans and securities and borrowings, primarily in multi-family and commercial real estate mortgage loans, one- to four-family, or residential, mortgage loans and mortgage-backed securities. Astoria Bank also invests in consumer and other loans, the United States Government, government agency and government-sponsored enterprise (GSE) securities, and other investments permitted by federal banking laws and regulations. Its loan portfolio consists primarily of mortgage loans, and consumer and other loans. The Company’s investment activities include securities available-for-sale and securities held-to-maturity.

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