Comparing Capital Bancorp (NASDAQ:CBNK) & First Community (NASDAQ:FCCO)

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

Dividends

First Community pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. Capital Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 1.5%. First Community pays out 25.4% of its earnings in the form of a dividend. Capital Bancorp pays out 16.5% 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 raised its dividend for 4 consecutive years and Capital Bancorp has raised its dividend for 3 consecutive years. First Community is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares First Community and Capital Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Community	$114.00 million	2.77	$19.20 million	$2.68	12.55
Capital Bancorp	$310.06 million	1.92	$57.17 million	$3.40	10.75

Capital Bancorp has higher revenue and earnings than First Community. Capital 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Community	18.32%	13.23%	1.16%
Capital Bancorp	17.47%	13.14%	1.46%

Institutional & Insider Ownership

61.3% of First Community shares are owned by institutional investors. Comparatively, 56.1% of Capital Bancorp shares are owned by institutional investors. 8.8% of First Community shares are owned by company insiders. Comparatively, 33.5% of Capital Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

First Community has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500. Comparatively, Capital Bancorp has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for First Community and Capital Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Community	0	1	2	0	2.67
Capital Bancorp	0	2	3	0	2.60

First Community presently has a consensus price target of $37.50, indicating a potential upside of 11.51%. Capital Bancorp has a consensus price target of $37.33, indicating a potential upside of 2.17%. Given First Community’s stronger consensus rating and higher probable upside, research analysts plainly believe First Community is more favorable than Capital Bancorp.

Summary

First Community beats Capital Bancorp on 9 of the 17 factors compared between the two stocks.

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.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.