Middlefield Banc (NASDAQ:MBCN) and First Community (NASDAQ:FCCO) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, dividends and valuation.

Dividends

Middlefield Banc pays an annual dividend of $1.12 per share and has a dividend yield of 2.5%. First Community pays an annual dividend of $0.40 per share and has a dividend yield of 2.1%. Middlefield Banc pays out 34.1% of its earnings in the form of a dividend. First Community pays out 36.7% 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 Community has increased its dividend for 6 consecutive years. Middlefield Banc is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Middlefield Banc and First Community’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Middlefield Banc 21.86% 9.14% 0.97%
First Community 18.52% 9.99% 0.99%

Insider & Institutional Ownership

32.1% of Middlefield Banc shares are held by institutional investors. Comparatively, 52.5% of First Community shares are held by institutional investors. 7.0% of Middlefield Banc shares are held by insiders. Comparatively, 7.4% of First Community shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Middlefield Banc and First Community, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Middlefield Banc 0 0 1 0 3.00
First Community 0 0 0 0 N/A

Middlefield Banc presently has a consensus price target of $57.00, suggesting a potential upside of 28.58%. Given Middlefield Banc’s higher possible upside, equities research analysts clearly believe Middlefield Banc is more favorable than First Community.

Risk and Volatility

Middlefield Banc has a beta of 0.3, suggesting that its share price is 70% less volatile than the S&P 500. Comparatively, First Community has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Earnings & Valuation

This table compares Middlefield Banc and First Community’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Middlefield Banc $48.85 million 2.94 $9.45 million $3.28 13.52
First Community $41.79 million 3.43 $5.81 million $1.09 17.25

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

About Middlefield Banc

Middlefield Banc Corp. operates as the bank holding company for The Middlefield Banking Company that provides various commercial banking services to small and medium-sized businesses, professionals, small business owners, and retail customers in northeastern and central Ohio. It accepts checking, savings, negotiable order of withdrawal, and money market accounts, as well as time certificates of deposit and IRA accounts. The company offers operational, working capital, term business, residential construction, professional, residential, and mortgage loans; loans to finance capital purchases; selected guaranteed or subsidized loan programs for small businesses; consumer installment loans to purchase automobiles and boats, as well as for home improvement and other personal expenditures; and agricultural loans. It also provides safe deposit facilities, travelers' and official checks, money orders, and ATM services; online banking and bill payment services to individuals; and online cash management services to business customers. In addition, the company resolves and disposes troubled assets in Ohio. As of January 23, 2018, it operated 14 full-service banking centers; an LPL financial brokerage office serving Beachwood, Chardon, Cortland, Dublin, Garrettsville, Mantua, Middlefield, Newbury, Orwell, Solon, Sunbury, Twinsburg, and Westerville; and a loan production office in Mentor, Ohio. Middlefield Banc Corp. was founded in 1901 and is headquartered in Middlefield, Ohio.

About First Community

First Community Corporation operates as the bank holding company for First Community Bank which offers various commercial and retail banking products and services to small-to-medium sized businesses, professional concerns, and individuals. The company operates through four segments: Commercial and Retail Banking, Mortgage Banking, Investment Advisory and Non-Deposit, and Corporate. Its deposit products include demand deposit accounts, checking accounts, NOW accounts, and savings accounts, as well as other time deposits, such as daily money market accounts and longer-term certificates of deposits. The company's loan portfolio comprises commercial loans that consist of secured and unsecured loans for working capital, business expansion, and the purchase of equipment and machinery; consumer loans, including secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; real estate construction and acquisition loans; and fixed and variable rate mortgage loans. It also provides other banking services, which include Internet banking, cash management services, safe deposit boxes, traveler's checks, direct deposit of payroll and social security checks, and automatic drafts for various accounts. In addition, the company offers non-deposit investment products and other investment brokerage services; VISA and MasterCard credit card services; financial and investment advisory services; and insurance services. It operates 18 full-service offices located in the Lexington County, Richland County, Newberry County, Kershaw County, Greenville County, Anderson County, Pickens County, and Aiken County, South Carolina; and Richmond County, Georgia. First Community Corporation was incorporated in 1994 and is headquartered in Lexington, South Carolina.

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