First Guaranty Bancshares (NASDAQ:FGBI) versus City (NASDAQ:CHCO) Financial Contrast

City (NASDAQ:CHCO) and First Guaranty Bancshares (NASDAQ:FGBI) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, earnings, risk and profitability.

Dividends

City pays an annual dividend of $3.48 per share and has a dividend yield of 2.8%. First Guaranty Bancshares pays an annual dividend of $0.04 per share and has a dividend yield of 0.8%. City pays out 40.0% of its earnings in the form of a dividend. First Guaranty Bancshares pays out -1.0% 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. City has raised its dividend for 6 consecutive years. City is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares City and First Guaranty Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
City	$379.76 million	4.74	$117.10 million	$8.70	14.37
First Guaranty Bancshares	$246.45 million	0.30	$12.45 million	($4.13)	-1.15

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

Profitability

This table compares City and First Guaranty Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
City	32.33%	16.66%	1.93%
First Guaranty Bancshares	-25.11%	-20.76%	-1.14%

Insider and Institutional Ownership

72.4% of City shares are held by institutional investors. Comparatively, 39.5% of First Guaranty Bancshares shares are held by institutional investors. 1.9% of City shares are held by insiders. Comparatively, 47.2% of First Guaranty Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

City has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, First Guaranty Bancshares has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for City and First Guaranty Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
City	0	5	1	0	2.17
First Guaranty Bancshares	1	1	0	0	1.50

City presently has a consensus price target of $133.25, suggesting a potential upside of 6.62%. Given City’s stronger consensus rating and higher possible upside, analysts clearly believe City is more favorable than First Guaranty Bancshares.

Summary

City beats First Guaranty Bancshares on 15 of the 17 factors compared between the two stocks.

About City

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust, and investment management, and other financial solutions in the United States. The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; home equity lines of credit; amortized home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts, as well as owner-occupied real estate and construction, land development, and lines of credit. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government-insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.

About First Guaranty Bancshares

First Guaranty Bancshares, Inc. operates as the holding company for First Guaranty Bank that provides commercial banking services in Louisiana and Texas. It offers various deposit products, including personal and business checking, savings, money market, and demand accounts, as well as time deposits to consumers, small businesses, and municipalities. The company provides loans, such as non-farm, non-residential loans secured by real estate, commercial and industrial loans, one- to four-family residential loans, multifamily loans, construction and land development loans, agricultural loans, farmland loans, and consumer and other loans to small to medium-sized businesses and professionals, and individuals. In addition, it offers a range of consumer services, including credit cards, mobile deposit capture, safe deposit boxes, official checks, online and mobile banking, automated teller machines, and online bill pay; provides additional solutions, such as merchant services, remote deposit capture, and lockbox services to business customers; and invests a portion of its assets in securities issued by the United States Government and its agencies, state and municipal obligations, corporate debt securities, mutual funds, and equity securities, as well as invests in mortgage-backed securities primarily issued or guaranteed by United States Government agencies or enterprises. First Guaranty Bancshares, Inc. was founded in 1934 and is headquartered in Hammond, Louisiana.