Critical Contrast: Third Coast Bancshares (NASDAQ:TCBX) & C&F Financial (NASDAQ:CFFI)

C&F Financial (NASDAQ:CFFI) and Third Coast Bancshares (NASDAQ:TCBX) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, dividends, analyst recommendations, institutional ownership, valuation and profitability.

Profitability

This table compares C&F Financial and Third Coast Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
C&F Financial	14.84%	11.03%	1.03%
Third Coast Bancshares	16.30%	12.05%	1.17%

Institutional and Insider Ownership

37.2% of C&F Financial shares are owned by institutional investors. Comparatively, 36.9% of Third Coast Bancshares shares are owned by institutional investors. 6.4% of C&F Financial shares are owned by company insiders. Comparatively, 10.5% of Third Coast Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for C&F Financial and Third Coast Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
C&F Financial	0	1	0	0	2.00
Third Coast Bancshares	0	2	3	0	2.60

Third Coast Bancshares has a consensus target price of $45.00, indicating a potential upside of 14.61%. Given Third Coast Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe Third Coast Bancshares is more favorable than C&F Financial.

Risk and Volatility

C&F Financial has a beta of 0.34, indicating that its share price is 66% less volatile than the S&P 500. Comparatively, Third Coast Bancshares has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.

Valuation and Earnings

This table compares C&F Financial and Third Coast Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
C&F Financial	$186.13 million	1.31	$26.83 million	$8.70	8.61
Third Coast Bancshares	$219.24 million	2.97	$47.67 million	$3.89	10.09

Third Coast Bancshares has higher revenue and earnings than C&F Financial. C&F Financial is trading at a lower price-to-earnings ratio than Third Coast Bancshares, indicating that it is currently the more affordable of the two stocks.

Dividends

C&F Financial pays an annual dividend of $1.92 per share and has a dividend yield of 2.6%. Third Coast Bancshares pays an annual dividend of $16.87 per share and has a dividend yield of 43.0%. C&F Financial pays out 22.1% of its earnings in the form of a dividend. Third Coast Bancshares pays out 433.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. C&F Financial has increased its dividend for 1 consecutive years.

Summary

Third Coast Bancshares beats C&F Financial on 12 of the 17 factors compared between the two stocks.

About C&F Financial

C&F Financial Corp. is a bank holding company, which engages in the provision of banking services to individuals and businesses. It operates through the following segments: Community Banking, Mortgage Banking and Consumer Finance. The Community Banking segment provides checking and savings deposit accounts, business, real estate, development, mortgage, home equity, and installment loans. The Mortgage Banking segment offers ancillary mortgage loan origination services for loan settlement and residential appraisals. The Consumer Finance segment consists of automobile financing through lending programs that are designed to serve customers in the non-prime market who have limited access to traditional automobile financing. The company was founded on March 8, 1994 and is headquartered in Toano, VA.

About Third Coast Bancshares

Third Coast Bancshares, Inc. operates as a bank holding company for Third Coast Bank, SSB that provides various commercial banking solutions to small and medium-sized businesses, and professionals. The company's deposit products include checking, savings, individual retirement, and money market accounts, as well as certificates of deposit. It also offers commercial and industrial loans, equipment loans, working capital lines of credit, guaranteed loans, auto finance, letters of credit, commercial and residential real estate, and construction, development, and other loans. In addition, the company provides retail and commercial online banking platforms, mobile banking apps, mortgage, treasury management solutions, merchant card services, and customer digital solutions, as well as debit and credit cards. Third Coast Bancshares, Inc. was founded in 2008 and is headquartered in Humble, Texas.