Truist Financial (NYSE:TFC – Get Free Report) and Financial Institutions (NASDAQ:FISI – Get Free Report) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.
Institutional & Insider Ownership
71.3% of Truist Financial shares are owned by institutional investors. Comparatively, 60.5% of Financial Institutions shares are owned by institutional investors. 0.2% of Truist Financial shares are owned by company insiders. Comparatively, 2.7% of Financial Institutions shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Truist Financial and Financial Institutions’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Truist Financial | -4.28% | 9.15% | 0.92% |
| Financial Institutions | 11.53% | 9.66% | 0.65% |
Analyst Ratings
This is a summary of current ratings and target prices for Truist Financial and Financial Institutions, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Truist Financial | 0 | 7 | 10 | 0 | 2.59 |
| Financial Institutions | 0 | 3 | 0 | 0 | 2.00 |
Truist Financial presently has a consensus target price of $43.17, suggesting a potential upside of 15.25%. Financial Institutions has a consensus target price of $20.67, suggesting a potential upside of 17.36%. Given Financial Institutions’ higher possible upside, analysts plainly believe Financial Institutions is more favorable than Truist Financial.
Valuation & Earnings
This table compares Truist Financial and Financial Institutions’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Truist Financial | $33.25 billion | 1.51 | -$1.09 billion | ($1.32) | -28.38 |
| Financial Institutions | $334.38 million | 0.81 | $50.26 million | $2.51 | 7.02 |
Financial Institutions has lower revenue, but higher earnings than Truist Financial. Truist Financial is trading at a lower price-to-earnings ratio than Financial Institutions, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Truist Financial has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Financial Institutions has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.
Dividends
Truist Financial pays an annual dividend of $2.08 per share and has a dividend yield of 5.6%. Financial Institutions pays an annual dividend of $1.20 per share and has a dividend yield of 6.8%. Truist Financial pays out -157.6% of its earnings in the form of a dividend. Financial Institutions pays out 47.8% 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. Truist Financial has raised its dividend for 13 consecutive years and Financial Institutions has raised its dividend for 13 consecutive years.
About Truist Financial
Truist Financial Corporation, a financial services company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. The company operates through three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings.Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides funding; asset management; automobile lending; credit card lending; consumer finance; home equity and mortgage lending; other direct retail lending; insurance; investment brokerage; mobile/online banking; payment solutions; point-of-sale lending; retail and small business deposit products; small business lending; and wealth management/private banking services. In addition, it offers asset based lending, investment banking and capital market, institutional trust, insurance premium finance, derivatives, commercial lending, international banking, leasing, merchant, commercial deposit and treasury, floor plan, mortgage warehouse lending, real estate lending, and supply chain financing services. Further, the company provides insurance brokerage, retail and wholesale brokerage, securities underwriting and market making, loan syndication, and investment management and advisory services. The company was formerly known as BB&T Corporation and changed its name to Truist Financial Corporation in December 2019. Truist Financial Corporation was founded in 1872 and is headquartered in Charlotte, North Carolina.
About Financial Institutions
Financial Institutions, Inc. operates as a holding company for the Five Star Bank, a chartered bank that provides banking and financial services to individuals, municipalities, and businesses in New York. The company provides checking and savings account programs, including money market accounts, certificates of deposit, sweep investments, and individual retirement and other qualified plan accounts, as well as NOW accounts. Its loan products include term loans and lines of credit; short and medium-term commercial loans for working capital, business expansion, and purchase of equipment; commercial business loans to the agricultural industry; commercial mortgage loans; one-to-four family residential mortgage loans, home improvement loans, closed-end home equity loans, and home equity lines of credit; and consumer loans, such as automobile, secured installment, and personal loans. The company offers personal insurance products, including automobile, homeowners, boat, recreational vehicle, landlord, and umbrella coverage; commercial insurance comprising property, liability, automobile, inland marine, workers compensation, bonds, crop, and umbrella insurance products; and financial services, such as life and disability insurance, medicare supplements, long-term care, annuities, mutual funds, and retirement programs. In addition, it offers customized investment advisory, wealth management, investment consulting, and retirement plan services, as well as operates a real estate investment trust that holds residential mortgages and commercial real estate loans. Financial Institutions, Inc. was founded in 1817 and is headquartered in Warsaw, New York.
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