Analyzing Citigroup (NYSE:C) and First Commonwealth Financial (NYSE:FCF)

Citigroup (NYSE:C) and First Commonwealth Financial (NYSE:FCF) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Profitability

This table compares Citigroup and First Commonwealth Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citigroup	7.43%	6.62%	0.53%
First Commonwealth Financial	20.38%	10.36%	1.22%

Dividends

Citigroup pays an annual dividend of $2.24 per share and has a dividend yield of 3.5%. First Commonwealth Financial pays an annual dividend of $0.52 per share and has a dividend yield of 3.5%. Citigroup pays out 35.4% of its earnings in the form of a dividend. First Commonwealth Financial pays out 37.4% 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.

Earnings and Valuation

This table compares Citigroup and First Commonwealth Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citigroup	$81.60 billion	1.49	$12.68 billion	$6.33	10.20
First Commonwealth Financial	$478.12 million	3.16	$142.57 million	$1.39	10.66

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

Risk and Volatility

Citigroup has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, First Commonwealth Financial has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500.

Insider & Institutional Ownership

71.7% of Citigroup shares are owned by institutional investors. Comparatively, 72.6% of First Commonwealth Financial shares are owned by institutional investors. 0.1% of Citigroup shares are owned by insiders. Comparatively, 2.2% of First Commonwealth Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Citigroup and First Commonwealth Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citigroup	0	3	11	0	2.79
First Commonwealth Financial	0	3	3	0	2.50

Citigroup currently has a consensus price target of $84.61, indicating a potential upside of 30.99%. First Commonwealth Financial has a consensus price target of $19.58, indicating a potential upside of 32.14%. Given First Commonwealth Financial’s higher possible upside, analysts plainly believe First Commonwealth Financial is more favorable than Citigroup.

About Citigroup

Citigroup Inc., a diversified financial service holding company, provides various financial product and services to consumers, corporations, governments, and institutions worldwide. It operates through five segments: Services, Markets, Banking, U.S. Personal Banking, and Wealth. The Services segment includes Treasury and Trade Solutions, which provides cash management, trade, and working capital solutions to multinational corporations, financial institutions, and public sector organizations; and Securities Services, such as cross-border support for clients, local market expertise, post-trade technologies, data solutions, and various securities services solutions. The Markets segment offers sales and trading services for equities, foreign exchange, rates, spread products, and commodities to corporate, institutional, and public sector clients; and market-making services, including asset classes, risk management solutions, financing, prime brokerage, research, securities clearing, and settlement. The banking segment includes investment banking; advisory services related to mergers and acquisitions, divestitures, restructurings, and corporate defense activities; and corporate lending, which includes corporate and commercial banking. The U.S. Personal Banking segment provides co-branded cards and retail banking services. The Wealth segment provides financial services to high-net-worth clients through banking, lending, mortgages, investment, custody, and trust product offerings; and to professional industries, including law firms, consulting groups, accounting, and asset management. The company was founded in 1812 and is headquartered in New York, New York.

About First Commonwealth Financial

First Commonwealth Financial Corporation, a financial holding company, provides various consumer and commercial banking services in the United States. Its consumer services include personal checking accounts, interest-earning checking accounts, savings and health savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection, IRA accounts, and automated teller machine (atm) services, as well as internet, mobile, and telephone banking services. The company's commercial banking services comprise commercial lending, business checking accounts, online account management services, payroll direct deposits, commercial cash management services, and repurchase agreements, as well as ACH origination services. In addition, it offers various trust and asset management services; auto, home, and business insurance, as well as term life insurance; and annuities, mutual funds, and stock and bond brokerage services through a broker-dealer and insurance brokers. The company was founded in 1934 and is headquartered in Indiana, Pennsylvania.