Critical Survey: Carter Bankshares (NASDAQ:CARE) versus First Bancorp (NASDAQ:FBNC)

Carter Bankshares (NASDAQ:CARE) and First Bancorp (NASDAQ:FBNC) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Insider and Institutional Ownership

41.5% of Carter Bankshares shares are held by institutional investors. Comparatively, 68.4% of First Bancorp shares are held by institutional investors. 2.4% of Carter Bankshares shares are held by company insiders. Comparatively, 2.0% of First Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Carter Bankshares and First Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carter Bankshares	0	4	1	0	2.20
First Bancorp	1	2	3	0	2.33

Carter Bankshares currently has a consensus target price of $30.75, suggesting a potential upside of 1.96%. First Bancorp has a consensus target price of $67.94, suggesting a potential upside of 14.82%. Given First Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe First Bancorp is more favorable than Carter Bankshares.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Carter Bankshares	36.79%	7.46%	0.73%
First Bancorp	22.12%	11.31%	1.46%

Risk and Volatility

Carter Bankshares has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500. Comparatively, First Bancorp has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.

Earnings and Valuation

This table compares Carter Bankshares and First Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carter Bankshares	$254.63 million	2.62	$31.00 million	$5.81	5.19
First Bancorp	$549.30 million	4.46	$111.05 million	$3.22	18.38

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

Dividends

Carter Bankshares pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. First Bancorp pays an annual dividend of $0.96 per share and has a dividend yield of 1.6%. Carter Bankshares pays out 6.9% of its earnings in the form of a dividend. First Bancorp pays out 29.8% 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.

Summary

First Bancorp beats Carter Bankshares on 12 of the 16 factors compared between the two stocks.

About Carter Bankshares

Carter Bankshares, Inc. operates as the bank holding company for Carter Bank & Trust that provides various banking products and services in the United States. It accepts various deposit products, including checking, savings, retirement, and money market accounts, as well as certificates of deposits. The company also offers commercial loans comprising secured and unsecured loans; consumer loans, such as secured and unsecured loans for financing automobiles, home improvements, education, overdraft protection, and personal investments, as well as residential mortgages; real estate construction, acquisition, commercial, and industrial loans; home equity lines of credit; and credit cards, as well as originates and holds fixed and variable rate mortgage loans. In addition, it provides other banking services that include safe deposit boxes, direct deposit of payroll, and social security checks; online banking products, including online and mobile banking, online account opening, bill pay, e-statement, mobile deposit, digital wallet, and ATM services; title insurance and other financial institution-related products and services; and treasury and corporate cash management services. Carter Bankshares, Inc. was founded in 1974 and is headquartered in Martinsville, Virginia.

About First Bancorp

First Bancorp operates as the bank holding company for First Bank that provides banking products and services for individuals and small to medium-sized businesses. The company accepts deposit products, such as checking, savings, and money market accounts, as well as time deposits, including certificate of deposits and individual retirement accounts. It also offers loans for a range of consumer and commercial purposes comprising loans for business, real estate, personal, home improvement, and automobiles, as well as residential mortgages and small business administration loans; and accounts receivable financing and factoring, inventory financing, and purchase order financing services. In addition, the company provides credit and debit cards, letter of credits, and safe deposit box rental services, as well as electronic funds transfer services consisting of wire transfers; and internet and mobile banking, cash management, bank-by-phone services, and remote deposit capture services. Further, it offers investment and insurance products, such as mutual funds, annuities, long-term care insurance, life insurance, and company retirement plans, as well as property and casualty insurance products; and financial planning services. The company was founded in 1934 and is headquartered in Southern Pines, North Carolina.