Reviewing Simmons First National (NASDAQ:SFNC) & First National (NASDAQ:FXNC)

First National (NASDAQ:FXNC) and Simmons First National (NASDAQ:SFNC) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Valuation and Earnings

This table compares First National and Simmons First National”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First National	$92.70 million	2.52	$6.97 million	$1.26	20.56
Simmons First National	$1.46 billion	1.95	$152.69 million	($2.93)	-6.70

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

Profitability

This table compares First National and Simmons First National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First National	9.53%	11.34%	0.96%
Simmons First National	-29.70%	5.84%	0.78%

Volatility and Risk

First National has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, Simmons First National has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Institutional and Insider Ownership

33.9% of First National shares are owned by institutional investors. Comparatively, 27.6% of Simmons First National shares are owned by institutional investors. 14.3% of First National shares are owned by company insiders. Comparatively, 1.4% of Simmons First National shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

First National pays an annual dividend of $0.68 per share and has a dividend yield of 2.6%. Simmons First National pays an annual dividend of $0.85 per share and has a dividend yield of 4.3%. First National pays out 54.0% of its earnings in the form of a dividend. Simmons First National pays out -29.0% 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. First National has raised its dividend for 10 consecutive years and Simmons First National has raised its dividend for 14 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and price targets for First National and Simmons First National, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First National	0	2	0	0	2.00
Simmons First National	1	3	2	2	2.63

First National currently has a consensus price target of $28.50, indicating a potential upside of 10.04%. Simmons First National has a consensus price target of $22.33, indicating a potential upside of 13.77%. Given Simmons First National’s stronger consensus rating and higher probable upside, analysts clearly believe Simmons First National is more favorable than First National.

Summary

Simmons First National beats First National on 10 of the 18 factors compared between the two stocks.

About First National

First National Corporation operates as the bank holding company for First Bank that provides various commercial banking services to small and medium-sized businesses, individuals, estates, local governmental entities, and non-profit organizations in Virginia. The company's deposit products include checking, savings, money market, and individual retirement accounts, as well as certificates of deposit and treasury management solutions. Its loan products comprise construction loans, including residential, land acquisition, and development loans; 1-4 family residential real estate loans; and commercial real estate loans that are secured by commercial real estate, including multi-family residential buildings, office and retail buildings, hotels, industrial buildings, and religious facilities. In addition, the company's loan products include commercial and industrial loans that are secured by business assets, such as accounts receivable, equipment, and inventory; home equity loans; and secured and unsecured consumer loans, such as lines of credit, automobile loans, deposit account loans, and installment and demand loans. Further, it provides wealth management services, including estate planning, investment management of assets, trustee under an agreement, trustee under a will, and estate settlement. Additionally, the company offers title insurance and investment services; and holds other real estate owned and office sites, as well as provides internet and mobile banking, remote deposit capture, and other traditional banking services. First National Corporation was founded in 1907 and is headquartered in Strasburg, Virginia.

About Simmons First National

Simmons First National Corporation operates as the holding company for Simmons Bank that provides banking and other financial products and services to individuals and businesses. The company offers checking, savings, and time deposits; consumer, real estate, and commercial loans; agricultural finance, equipment, and small business administration lending; trust and fiduciary services; credit cards; investment management products; treasury management; insurance products; and securities and investment services. It also provides ATM services; Internet and mobile banking platforms; overdraft facilities; and safe deposit boxes. The company was founded in 1903 and is headquartered in Pine Bluff, Arkansas.