First National (NASDAQ:FXNC – Get Rating) and First Community (NASDAQ:FCCO – Get Rating) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.
Institutional and Insider Ownership
33.8% of First National shares are held by institutional investors. Comparatively, 50.8% of First Community shares are held by institutional investors. 16.5% of First National shares are held by company insiders. Comparatively, 5.1% of First Community 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 National and First Community’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|First National||$62.04 million||1.53||$16.80 million||$2.69||5.61|
|First Community||$62.69 million||2.05||$14.61 million||$1.91||8.86|
This is a summary of recent ratings and recommmendations for First National and First Community, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
First National presently has a consensus price target of $21.50, indicating a potential upside of 42.38%. First Community has a consensus price target of $22.00, indicating a potential upside of 29.95%. Given First National’s stronger consensus rating and higher possible upside, analysts plainly believe First National is more favorable than First Community.
Risk & Volatility
First National has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, First Community has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500.
First National pays an annual dividend of $0.60 per share and has a dividend yield of 4.0%. First Community pays an annual dividend of $0.56 per share and has a dividend yield of 3.3%. First National pays out 22.3% of its earnings in the form of a dividend. First Community pays out 29.3% 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 National has raised its dividend for 8 consecutive years and First Community has raised its dividend for 2 consecutive years. First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares First National and First Community’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
First National beats First Community on 12 of the 16 factors compared between the two stocks.
About First National
First National Corp. operates as a bank holding company, which engages in the provision of consumer and business banking services through its subsidiary. It offers savings, checking, mortgage lending, home equity, treasury management, construction loan, commercial mortgage, and rental properties. The company was founded on September 7, 1983 and is headquartered in Strasburg, VA.
About First Community
First Community Corp. is a bank holding company, which engages in the provision of commercial banking services through its subsidiary, First Community Bank. It operates through the following segments: Commercial and Retail Banking, Mortgage Banking, Investment Advisory and Non-Deposit, and Corporate. The Commercial and Retail Banking segment includes deposit and lending products and services to its commercial and retail customers. The Mortgage Banking segment offers mortgage origination services for loans that will be sold to investors in the secondary market. The Investment Advisory and Non-Deposit segment consists of investment advisory services and non-deposit products. The Corporate segment consists of parent company’s financial information, including interest on parent company debt and dividend income received from First Community Bank. The company was founded on November 2, 1994 and is headquartered in Lexington, SC.
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