Financial Review: First Guaranty Bancshares (NASDAQ:FGBI) versus First Community Bancshares (NASDAQ:FCBC)

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

Insider and Institutional Ownership

39.5% of First Guaranty Bancshares shares are held by institutional investors. Comparatively, 35.0% of First Community Bancshares shares are held by institutional investors. 47.2% of First Guaranty Bancshares shares are held by company insiders. Comparatively, 3.7% of First Community Bancshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for First Guaranty Bancshares and First Community Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Guaranty Bancshares	1	1	0	0	1.50
First Community Bancshares	0	0	1	0	3.00

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Guaranty Bancshares	-25.26%	-20.79%	-1.10%
First Community Bancshares	26.32%	10.17%	1.59%

Earnings and Valuation

This table compares First Guaranty Bancshares and First Community Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Guaranty Bancshares	$221.76 million	0.70	-$56.02 million	($3.88)	-2.53
First Community Bancshares	$185.42 million	4.46	$48.79 million	$2.66	16.28

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

Volatility and Risk

First Guaranty Bancshares has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, First Community Bancshares has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500.

Dividends

First Guaranty Bancshares pays an annual dividend of $0.04 per share and has a dividend yield of 0.4%. First Community Bancshares pays an annual dividend of $1.24 per share and has a dividend yield of 2.9%. First Guaranty Bancshares pays out -1.0% of its earnings in the form of a dividend. First Community Bancshares pays out 46.6% 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 Bancshares has increased its dividend for 13 consecutive years. First Community Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

First Community Bancshares beats First Guaranty Bancshares on 12 of the 16 factors compared between the two stocks.

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.

About First Community Bancshares

First Community Bankshares, Inc. operates as the financial holding company for First Community Bank that provides various banking products and services. It offers demand deposit accounts, savings and money market accounts, certificates of deposit, and individual retirement plans; and commercial, consumer real estate, and consumer and other loans. The company also provides trust management, estate administration, and investment advisory services; and investment management services. It serves individuals and businesses across various industries, such as education, government, and health services; coal mining and gas extraction; retail trade; construction; manufacturing; tourism; and transportation. The company operates through branches in West Virginia, Virginia, North Carolina, and Tennessee. Community Bankshares, Inc. was founded in 1874 and is headquartered in Bluefield, Virginia.