First Community (NASDAQ:FCCO) and United Community Banks (NYSE:UCB) Head to Head Comparison

First Community (NASDAQ:FCCO) and United Community Banks (NYSE:UCB) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares First Community and United Community Banks”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Community	$103.43 million	2.17	$13.95 million	$2.40	12.18
United Community Banks	$1.50 billion	2.54	$252.40 million	$2.52	12.45

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

Profitability

This table compares First Community and United Community Banks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Community	16.69%	12.46%	0.94%
United Community Banks	20.67%	9.42%	1.17%

Dividends

First Community pays an annual dividend of $0.64 per share and has a dividend yield of 2.2%. United Community Banks pays an annual dividend of $1.00 per share and has a dividend yield of 3.2%. First Community pays out 26.7% of its earnings in the form of a dividend. United Community Banks pays out 39.7% 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. First Community has raised its dividend for 4 consecutive years.

Insider and Institutional Ownership

61.3% of First Community shares are owned by institutional investors. Comparatively, 82.3% of United Community Banks shares are owned by institutional investors. 5.9% of First Community shares are owned by company insiders. Comparatively, 0.5% of United Community Banks shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for First Community and United Community Banks, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Community	0	1	3	1	3.00
United Community Banks	0	4	3	0	2.43

First Community presently has a consensus price target of $29.67, suggesting a potential upside of 1.46%. United Community Banks has a consensus price target of $35.33, suggesting a potential upside of 12.64%. Given United Community Banks’ higher possible upside, analysts plainly believe United Community Banks is more favorable than First Community.

Risk & Volatility

First Community has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500. Comparatively, United Community Banks has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Summary

United Community Banks beats First Community on 11 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 United Community Banks

United Community Banks, Inc. operates as the financial holding company for United Community Bank that provides financial products and services to commercial, retail, government, education, energy, health care, and real estate sectors. The company accepts various deposit products, including checking, savings, money market, and other deposit accounts. It also offers lending services, including real estate, consumer, and commercial loans, to individuals, small businesses, mid-sized commercial businesses, and non-profit organizations, as well as secured and unsecured, and mortgage loans. In addition, the company originate loans partially guaranteed by the SBA and USDA loan programs. Further, it provides wealth management services comprising financial planning, customized portfolio management, and investment advice; trust services to manage fiduciary assets; non-deposit investment products; and insurance products, including life insurance, long-term care insurance, and tax-deferred annuities, as well as invests in residential and commercial mortgage-backed securities, asset-backed securities, the U.S. treasury, the U.S. agency, and municipal obligations. Additionally, the company offers reinsurance on a property insurance contract; insurance agency services; brokerage services; and payment processing, merchant, wire transfer, private banking, and other related financial services. It operates through a network of 171 branches in Florida, Georgia, North Carolina, South Carolina, and Tennessee. United Community Banks, Inc. was founded in 1950 and is headquartered in Blairsville, Georgia.