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

Analyst Recommendations

This is a breakdown of recent ratings for First Bancorp and Guaranty Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Bancorp 0 1 3 0 2.75
Guaranty Bancorp 0 3 2 0 2.40

First Bancorp currently has a consensus target price of $35.33, indicating a potential downside of 3.72%. Guaranty Bancorp has a consensus target price of $29.13, indicating a potential upside of 2.37%. Given Guaranty Bancorp’s higher possible upside, analysts plainly believe Guaranty Bancorp is more favorable than First Bancorp.

Dividends

First Bancorp pays an annual dividend of $0.32 per share and has a dividend yield of 0.9%. Guaranty Bancorp pays an annual dividend of $0.50 per share and has a dividend yield of 1.8%. First Bancorp pays out 18.6% of its earnings in the form of a dividend. Guaranty Bancorp pays out 37.6% 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.

Valuation & Earnings

This table compares First Bancorp and Guaranty Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Bancorp $177.16 million 5.11 $42.45 million $1.72 21.34
Guaranty Bancorp $131.60 million 6.04 $37.13 million $1.33 21.39

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

Risk and Volatility

First Bancorp has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500. Comparatively, Guaranty Bancorp has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.

Insider & Institutional Ownership

65.8% of First Bancorp shares are held by institutional investors. Comparatively, 70.5% of Guaranty Bancorp shares are held by institutional investors. 1.9% of First Bancorp shares are held by insiders. Comparatively, 8.4% of Guaranty Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
First Bancorp 19.96% 9.22% 1.00%
Guaranty Bancorp 24.17% 11.32% 1.20%

First Bancorp Company Profile

First Bancorp is the bank holding company for First Bank (the Bank). The Company’s principal activity is the ownership and operation of First Bank. The Bank engages in a range of banking activities, including the acceptance of deposits and the making of loans. The Bank offers credit cards, debit cards, letters of credit, safe deposit box rentals and electronic funds transfer services, including wire transfers. In addition, the Bank offers Internet banking, mobile banking, cash management and bank-by-phone capabilities to its customers. It also offers a mobile check deposit feature for its mobile banking customers to deposit checks through their smartphone. The Bank offers remote deposit capture for its business customers. The Company provides loans for a range of consumer and commercial purposes, including loans for business, agriculture, real estate, personal uses, home improvement and automobiles.

Guaranty Bancorp Company Profile

Guaranty Bancorp is a bank holding company. The Company’s bank subsidiary is Guaranty Bank and Trust Company (the Bank). As of December 31, 2016, the Company operated 32 branches and two investment management firms, Private Capital Management LLC (PCM) and Cherry Hills Investment Advisors Inc. (CHIA), in Colorado through the Bank. The Bank provides banking and other financial services, including commercial and industrial loans, real estate loans, construction loans, consumer loans and agriculture loans across its targeted Colorado markets to consumers and small to medium-sized businesses, including the owners and employees of those businesses. Along with loans and depository services, the Bank also provides wealth management solutions, including trust and investment management services. The Bank’s commercial and industrial loan portfolio consists of operating loans secured by business assets.

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