First Niagara Financial Group (FNFG) and Sandy Spring Bancorp (SASR) Critical Contrast

First Niagara Financial Group (NASDAQ: FNFG) and Sandy Spring Bancorp (NASDAQ:SASR) are both financials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.

Institutional & Insider Ownership

70.4% of Sandy Spring Bancorp shares are held by institutional investors. 2.6% of Sandy Spring Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares First Niagara Financial Group and Sandy Spring Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Niagara Financial Group N/A N/A N/A $0.49 20.78
Sandy Spring Bancorp $221.60 million 4.22 $48.25 million $2.41 16.19

Sandy Spring Bancorp has higher revenue and earnings than First Niagara Financial Group. Sandy Spring Bancorp is trading at a lower price-to-earnings ratio than First Niagara Financial Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares First Niagara Financial Group and Sandy Spring Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Niagara Financial Group 14.04% 4.06% 0.47%
Sandy Spring Bancorp 24.31% 10.61% 1.12%

Dividends

First Niagara Financial Group pays an annual dividend of $0.32 per share and has a dividend yield of 3.1%. Sandy Spring Bancorp pays an annual dividend of $1.04 per share and has a dividend yield of 2.7%. First Niagara Financial Group pays out 65.3% of its earnings in the form of a dividend. Sandy Spring Bancorp pays out 43.2% 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.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for First Niagara Financial Group and Sandy Spring Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Niagara Financial Group 0 0 0 0 N/A
Sandy Spring Bancorp 0 2 0 0 2.00

Sandy Spring Bancorp has a consensus target price of $40.00, suggesting a potential upside of 2.51%. Given Sandy Spring Bancorp’s higher probable upside, analysts plainly believe Sandy Spring Bancorp is more favorable than First Niagara Financial Group.

Summary

Sandy Spring Bancorp beats First Niagara Financial Group on 9 of the 11 factors compared between the two stocks.

First Niagara Financial Group Company Profile

First Niagara Financial Group Inc. is a bank holding company for First Niagara Bank, N.A. (the Bank). The Bank is engaged in providing financial services to individuals and businesses in New York, Western and Eastern Pennsylvania, Connecticut, and Western Massachusetts. The Bank is a nationally chartered regional bank providing financial services to individuals, families and businesses. The Bank operates through two segments: banking and financial services. The banking segment includes all of its retail and commercial banking operations. The financial services segment includes its insurance operations. Its financial services activities consist predominantly of insurance sales. Its financial services activities consist of insurance sales. The Bank provides a range of products and services through its retail consumer, commercial, business services and wealth management operations, including retail banking, cash management, insurance and wealth management products.

Sandy Spring Bancorp Company Profile

Sandy Spring Bancorp, Inc. is the bank holding company for Sandy Spring Bank (the Bank). The Company operates through three segments: Community Banking, Insurance and Investment Management. The Company’s Community Banking segment operates through Sandy Spring Bank and involves delivering a range of financial products and services, including various loan and deposit products to both individuals and businesses. The Insurance segment operates through Sandy Spring Insurance Corporation, a subsidiary of the Bank, and offers annuities as an alternative to traditional deposit accounts. The Investment Management segment operates through West Financial Services, Inc., a subsidiary of the Bank, which provides investment management and financial planning services. As of December 31, 2016, the Bank conducted commercial banking business through 44 community offices and six financial centers located in Central Maryland, Northern Virginia and Washington D.C.

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