First Capital (NASDAQ:FCAP – Get Free Report) and Northpointe Bancshares (NYSE:NPB – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.
Volatility & Risk
First Capital has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Northpointe Bancshares has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500.
Profitability
This table compares First Capital and Northpointe Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| First Capital | 26.03% | 12.82% | 1.38% |
| Northpointe Bancshares | 17.92% | 14.80% | 1.28% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| First Capital | 0 | 1 | 1 | 0 | 2.50 |
| Northpointe Bancshares | 1 | 2 | 1 | 0 | 2.00 |
Northpointe Bancshares has a consensus price target of $19.83, suggesting a potential upside of 13.64%. Given Northpointe Bancshares’ higher probable upside, analysts clearly believe Northpointe Bancshares is more favorable than First Capital.
Valuation & Earnings
This table compares First Capital and Northpointe Bancshares”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| First Capital | $65.31 million | 3.39 | $16.37 million | $5.23 | 12.65 |
| Northpointe Bancshares | $471.18 million | 1.28 | $83.41 million | $2.22 | 7.86 |
Northpointe Bancshares has higher revenue and earnings than First Capital. Northpointe Bancshares is trading at a lower price-to-earnings ratio than First Capital, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
11.7% of First Capital shares are held by institutional investors. 4.1% of First Capital shares are held by company insiders. Comparatively, 18.3% of Northpointe Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Dividends
First Capital pays an annual dividend of $1.24 per share and has a dividend yield of 1.9%. Northpointe Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.6%. First Capital pays out 23.7% of its earnings in the form of a dividend. Northpointe Bancshares pays out 4.5% 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 Capital has raised its dividend for 2 consecutive years. First Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
First Capital beats Northpointe Bancshares on 10 of the 16 factors compared between the two stocks.
About First Capital
First Capital, Inc. operates as the bank holding company for First Harrison Bank that provides various banking services to individuals and business customers. The company offers various deposit instruments, including non-interest-bearing checking accounts, negotiable order of withdrawal accounts, money market accounts, regular savings accounts, certificates of deposit, and retirement savings plans. It also provides residential mortgage loans, construction loans for residential and commercial properties, and commercial real estate loans, as well as commercial business loans. In addition, the company originates mortgage loans for sale in the secondary market and sells non-deposit investment products; and offers various secured or guaranteed consumer loans comprising automobile and truck loans, home equity loans, home improvement loans, boat loans, mobile home loans, credit cards and other personal loans, and loans secured by savings deposits, as well as unsecured consumer loans. First Capital, Inc. was founded in 1891 and is based in Corydon, Indiana.
About Northpointe Bancshares
Northpointe Bancshares, Inc. operates as a bank holding company. It offers a nationwide mortgage purchase program, residential mortgage loans, digital deposit banking to retail customers and custodial deposit services. The company was founded by Charles A. Williams in 1998 and is headquartered in Grand Rapids, MI.
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