Huntington Bancshares (NASDAQ:HBAN) vs. First Business Financial Services (NASDAQ:FBIZ) Financial Analysis

Huntington Bancshares (NASDAQ:HBAN) and First Business Financial Services (NASDAQ:FBIZ) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.

Profitability

This table compares Huntington Bancshares and First Business Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Huntington Bancshares	17.36%	11.81%	1.06%
First Business Financial Services	17.59%	14.44%	1.18%

Volatility & Risk

Huntington Bancshares has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, First Business Financial Services has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Huntington Bancshares and First Business Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Huntington Bancshares	1	3	15	2	2.86
First Business Financial Services	0	0	4	0	3.00

Huntington Bancshares currently has a consensus target price of $18.68, indicating a potential upside of 12.28%. First Business Financial Services has a consensus target price of $57.25, indicating a potential upside of 17.32%. Given First Business Financial Services’ stronger consensus rating and higher probable upside, analysts plainly believe First Business Financial Services is more favorable than Huntington Bancshares.

Institutional and Insider Ownership

80.7% of Huntington Bancshares shares are held by institutional investors. Comparatively, 60.1% of First Business Financial Services shares are held by institutional investors. 0.9% of Huntington Bancshares shares are held by insiders. Comparatively, 5.1% of First Business Financial Services shares are held by 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.

Dividends

Huntington Bancshares pays an annual dividend of $0.62 per share and has a dividend yield of 3.7%. First Business Financial Services pays an annual dividend of $1.16 per share and has a dividend yield of 2.4%. Huntington Bancshares pays out 45.9% of its earnings in the form of a dividend. First Business Financial Services pays out 20.6% 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. First Business Financial Services has increased its dividend for 13 consecutive years.

Earnings & Valuation

This table compares Huntington Bancshares and First Business Financial Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Huntington Bancshares	$7.69 billion	3.16	$1.94 billion	$1.35	12.33
First Business Financial Services	$262.38 million	1.55	$44.24 million	$5.62	8.68

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

About Huntington Bancshares

Huntington Bancshares Incorporated operates as the bank holding company for The Huntington National Bank that provides commercial, consumer, and mortgage banking services in the United States. The company offers financial products and services to consumer and business customers, including deposits, lending, payments, mortgage banking, dealer financing, investment management, trust, brokerage, insurance, and other financial products and services. It also provides 24-hour grace, asterisk-free checking, money scout, $50 safety zone, standby cash, early pay, instant access, savings goal getter, and Huntington heads up; digitally powered consumer and business financial solutions to consumer lending, regional banking, branch banking, and wealth management customers; direct and indirect consumer loans, as well as dealer finance loans and deposits; and private banking, wealth management and legacy planning through investment and portfolio management, fiduciary administration and trust, institutional custody, and full-service retail brokerage investment services. The company offers equipment financing, asset-based lending, distribution finance, structured lending, and municipal financing solutions, as well as Huntington ChoicePay. In addition, it offers lending, liquidity, treasury management and other payment services, and capital markets; government and non-profits, healthcare, technology and telecommunications, franchises, financial sponsors, and global services; and corporate risk management, institutional sales and trading, debt and equity issuance, and additional advisory services. The company offers its products through a network of channels, including branches and ATMs, online and mobile banking, and through customer call centers to customers in middle market banking, corporate, specialty, and government banking, asset finance, commercial real estate banking, and capital markets. The company was founded in 1866 and is headquartered in Columbus, Ohio.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.