First Community (NASDAQ:FCCO – Get Free Report) and Independent Bank (NASDAQ:INDB – Get Free Report) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.
Risk and Volatility
First Community has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500. Comparatively, Independent Bank has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.
Valuation and Earnings
This table compares First Community and Independent Bank”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| First Community | $91.36 million | 3.41 | $19.20 million | $2.86 | 11.57 |
| Independent Bank | $1.01 billion | 3.91 | $205.12 million | $6.75 | 12.40 |
Independent Bank has higher revenue and earnings than First Community. First Community is trading at a lower price-to-earnings ratio than Independent Bank, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares First Community and Independent Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| First Community | 19.55% | 13.73% | 1.24% |
| Independent Bank | 24.27% | 9.61% | 1.36% |
Analyst Recommendations
This is a breakdown of recent ratings and target prices for First Community and Independent Bank, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| First Community | 0 | 0 | 2 | 0 | 3.00 |
| Independent Bank | 1 | 0 | 4 | 2 | 3.00 |
First Community presently has a consensus target price of $37.50, suggesting a potential upside of 13.29%. Independent Bank has a consensus target price of $91.86, suggesting a potential upside of 9.72%. Given First Community’s higher probable upside, equities research analysts clearly believe First Community is more favorable than Independent Bank.
Dividends
First Community pays an annual dividend of $0.68 per share and has a dividend yield of 2.1%. Independent Bank pays an annual dividend of $2.56 per share and has a dividend yield of 3.1%. First Community pays out 23.8% of its earnings in the form of a dividend. Independent Bank pays out 37.9% 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 and Independent Bank has raised its dividend for 15 consecutive years. Independent Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
61.3% of First Community shares are owned by institutional investors. Comparatively, 83.4% of Independent Bank shares are owned by institutional investors. 8.8% of First Community shares are owned by insiders. Comparatively, 1.6% of Independent Bank shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Independent Bank beats First Community on 13 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 Independent Bank
Independent Bank Corp. operates as the bank holding company for Rockland Trust Company that provides commercial banking products and services to individuals and small-to-medium sized businesses in the United States. The company provides interest checking, money market, and savings accounts, as well as demand deposits and time certificates of deposit. It offers commercial real estate and construction, commercial and industrial, small business, secured and unsecured commercial, and consumer real estate loans; term loans and revolving/nonrevolving lines of credit; overdraft protection and letters of credit; and residential mortgages and home equity loans and lines. In addition, the company provides cash management services, such as ACH transaction processing, positive pay, and remote deposit services; investment management and trust services to individuals, institutions, small businesses, and charitable institutions; mobile, online, and telephone banking; estate settlement, financial planning, tax services, and other services; automated teller machines; debit and credit cards; and mutual fund and unit investment trust shares, third party model portfolios, general securities, fixed and variable annuities, and life insurance products, as well as advisory platforms. Further, it invests in low-income housing tax credit projects; holds, maintains, and disposes foreclosed properties; and operates as an investment advisor. Independent Bank Corp. was founded in 1907 and is headquartered in Rockland, Massachusetts.
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