Analyzing Community Trust Bancorp (NASDAQ:CTBI) & First Community (NASDAQ:FCCO)

Community Trust Bancorp (NASDAQ:CTBI) and First Community (NASDAQ:FCCO) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, valuation, earnings and dividends.

Risk & Volatility

Community Trust Bancorp 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 0.5, meaning that its stock price is 50% less volatile than the S&P 500.

Dividends

Community Trust Bancorp pays an annual dividend of $2.12 per share and has a dividend yield of 4.1%. First Community pays an annual dividend of $0.64 per share and has a dividend yield of 2.4%. Community Trust Bancorp pays out 41.0% of its earnings in the form of a dividend. First Community pays out 28.7% 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. Community Trust Bancorp has raised its dividend for 44 consecutive years and First Community has raised its dividend for 4 consecutive years. Community Trust Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Community Trust Bancorp and First Community, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community Trust Bancorp	0	0	3	0	3.00
First Community	0	1	3	1	3.00

Community Trust Bancorp currently has a consensus price target of $63.50, indicating a potential upside of 21.72%. First Community has a consensus price target of $29.67, indicating a potential upside of 10.86%. Given Community Trust Bancorp’s higher possible upside, analysts clearly believe Community Trust Bancorp is more favorable than First Community.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Community Trust Bancorp	23.24%	11.91%	1.48%
First Community	15.87%	11.65%	0.87%

Insider & Institutional Ownership

60.2% of Community Trust Bancorp shares are held by institutional investors. Comparatively, 61.3% of First Community shares are held by institutional investors. 4.3% of Community Trust Bancorp shares are held by insiders. Comparatively, 5.9% of First Community shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Community Trust Bancorp and First Community”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community Trust Bancorp	$376.01 million	2.51	$82.81 million	$5.17	10.09
First Community	$103.43 million	1.99	$13.95 million	$2.23	12.00

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

Summary

Community Trust Bancorp beats First Community on 11 of the 16 factors compared between the two stocks.

About Community Trust Bancorp

Community Trust Bancorp, Inc. operates as the bank holding company for Community Trust Bank, Inc. that engages in the provision of commercial and personal banking, and trust and wealth management services to small and mid-sized communities in eastern, northeastern, central, and south-central Kentucky, as well as southern West Virginia, and northeastern Tennessee. The company accepts time and demand deposits, checking accounts, savings accounts and savings certificates, individual retirement accounts and Keogh plans, and money market accounts. Its loan portfolio includes commercial, construction, mortgage, and personal loans; lease-financing, lines of credit, revolving lines of credit, and term loans, as well as other specialized loans, including asset-based financing; residential and commercial real estate loans; and consumer loans. The company also provides cash management, renting safe deposit boxes, and funds transfer services; issues letters of credit; and acts as a trustee of personal trusts, executor of estates, trustee for employee benefit trusts, and paying agent for bond and stock issues, as well as an investment agent and depositor for securities. In addition, it offers securities brokerage services; debit cards; annuity and life insurance products; and repurchase agreements, as well as mobile, internet banking, and e-statement services. The company was founded in 1903 and is headquartered in Pikeville, Kentucky.

About First Community

First Community Corporation operates as the bank holding company for First Community Bank that provides various commercial and retail banking products and services to small-to-medium sized businesses, professionals, and individuals. The company operates through Commercial and Retail Banking, Mortgage Banking, and Investment Advisory and Non-Deposit segments. Its deposit products include checking, NOW, savings, and individual retirement accounts; and demand deposits, as well as other time deposits, such as daily money market accounts and longer-term certificates of deposit. The company's loan portfolio comprises commercial loans that include 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 online banking, internet banking, cash management, safe deposit boxes, 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; investment advisory services; and insurance services. The company was incorporated in 1994 and is headquartered in Lexington, South Carolina.