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

Profitability

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

Net Margins Return on Equity Return on Assets
First Community Bancshares 21.56% 7.38% 1.05%
First Community Corporation 17.39% 8.24% 0.75%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for First Community Bancshares and First Community Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Community Bancshares 0 2 0 0 2.00
First Community Corporation 0 0 1 0 3.00

First Community Bancshares presently has a consensus price target of $23.50, indicating a potential downside of 11.62%. First Community Corporation has a consensus price target of $21.00, indicating a potential upside of 1.94%. Given First Community Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe First Community Corporation is more favorable than First Community Bancshares.

Earnings and Valuation

This table compares First Community Bancshares and First Community Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Community Bancshares $107.58 million 4.21 $25.36 million $1.49 17.85
First Community Corporation $36.89 million 3.74 $6.76 million $1.01 20.40

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

Dividends

First Community Bancshares pays an annual dividend of $0.72 per share and has a dividend yield of 2.7%. First Community Corporation pays an annual dividend of $0.36 per share and has a dividend yield of 1.7%. First Community Bancshares pays out 48.3% of its earnings in the form of a dividend. First Community Corporation pays out 35.6% 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.

Volatility & Risk

First Community Bancshares has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, First Community Corporation has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Insider & Institutional Ownership

40.3% of First Community Bancshares shares are held by institutional investors. Comparatively, 47.1% of First Community Corporation shares are held by institutional investors. 3.3% of First Community Bancshares shares are held by insiders. Comparatively, 8.6% of First Community Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

First Community Corporation beats First Community Bancshares on 9 of the 16 factors compared between the two stocks.

About First Community Bancshares

First Community Bancshares, Inc. is a financial holding company. The Company provides commercial banking products and services through its subsidiary First Community Bank (the Bank). The Bank operates as First Community Bank in Virginia, West Virginia, and North Carolina and People’s Community Bank, a Division of First Community Bank, in Tennessee. It provides insurance services through its subsidiary First Community Insurance Services, and offers wealth management and investment advice through its Trust Division and subsidiary First Community Wealth Management. Its products include demand deposit accounts, savings and money market accounts, certificates of deposit, and individual retirement arrangements; commercial, consumer, and real estate mortgage loans and lines of credit; various credit card, debit card, and automated teller machine card services; corporate and personal trust services; investment management services, and life, health, and property and casualty insurance products.

About First Community Corporation

First Community Corporation is a bank holding company for First Community Bank (the Bank). The Bank offers commercial and retail banking services to small-to-medium sized businesses, professional concerns and individuals, primarily in Richland, Lexington, Kershaw and Newberry Counties of South Carolina and the surrounding areas. The Bank offers a range of traditional banking products and services for professionals and small-to medium-sized businesses, including consumer and commercial, mortgage, brokerage and investment, and insurance services. The Bank also offers online banking to its customers. Its other services include Internet banking, cash management services, safe deposit boxes, traveler checks, direct deposit of payroll and social security checks, and automatic drafts for various accounts. The Bank offers non-deposit investment products and other investment brokerage services through a registered representative with an affiliation through LPL Financial.

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