First of Long Island (NASDAQ:FLIC) versus Financial Institutions (NASDAQ:FISI) Critical Analysis

Financial Institutions (NASDAQ:FISI) and First of Long Island (NASDAQ:FLIC) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, dividends, analyst recommendations, valuation, profitability and earnings.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Financial Institutions and First of Long Island, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Financial Institutions	0	2	0	0	2.00
First of Long Island	0	1	0	0	2.00

Financial Institutions currently has a consensus price target of $22.00, indicating a potential downside of 7.72%. First of Long Island has a consensus price target of $13.00, indicating a potential upside of 3.83%. Given First of Long Island’s higher probable upside, analysts clearly believe First of Long Island is more favorable than Financial Institutions.

Dividends

Financial Institutions pays an annual dividend of $1.20 per share and has a dividend yield of 5.0%. First of Long Island pays an annual dividend of $0.84 per share and has a dividend yield of 6.7%. Financial Institutions pays out 37.7% of its earnings in the form of a dividend. First of Long Island pays out 95.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Financial Institutions has increased its dividend for 13 consecutive years.

Institutional & Insider Ownership

60.5% of Financial Institutions shares are owned by institutional investors. Comparatively, 48.3% of First of Long Island shares are owned by institutional investors. 2.7% of Financial Institutions shares are owned by insiders. Comparatively, 6.3% of First of Long Island shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Financial Institutions and First of Long Island”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Financial Institutions	$334.38 million	1.10	$50.26 million	$3.18	7.50
First of Long Island	$161.82 million	1.74	$26.24 million	$0.88	14.23

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

Profitability

This table compares Financial Institutions and First of Long Island’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Financial Institutions	13.72%	11.61%	0.82%
First of Long Island	11.15%	5.49%	0.49%

Volatility & Risk

Financial Institutions has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, First of Long Island has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Summary

Financial Institutions beats First of Long Island on 10 of the 15 factors compared between the two stocks.

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.

About First of Long Island

The First of Long Island Corporation operates as the holding company for The First National Bank of Long Island that provides financial services to small and medium-sized businesses, professionals, consumers, municipalities, and other organizations. The company offers business and small business checking, personal checking, negotiable order of withdrawal, interest on lawyer, escrow service, rent security, personal and nonpersonal money market, savings, time deposit, and individual retirement accounts. It also provides commercial and residential mortgage, commercial and industrial, small business credit scored, Small Business Administration, construction and land development, consumer, and home equity lines/loans, as well as standby letters of credit; debit or credit cards; and overdraft facilities. In addition, the company offers life insurance, investment management, trust, estate and custody, retail investment, bill payment, lockbox, ACH, safe deposit box rental, wire transfer, money order, checkbook printing, check, ATM, and online and mobile banking services. The First of Long Island Corporation was founded in 1927 and is headquartered in Melville, New York.